Why do we always think
he classical economy assumes that people are rational beings who weigh up the advantages and disadvantages in every situation with a cool head in order to then make a logical decision. The functioning of our economic and social system is based on this assumption of how people think and act. But does this model correspond to reality? Or is it not rather the case that humans are not only rational beings and therefore sometimes act anything but rational? The example of the financial and economic crisis shows all too clearly how the classical economy with its working model of homo oeconomicus reaches its limits, how the human nature of theory thwarts the theory. For good reason it can be doubted that we would be dealing with the "crisis" today if we were really all like images of homo oeconomicus punched out of a stencil. Because what the classical economy has not taken into account so far: Factors that are difficult to measure - feelings, expectations, social norms - also play a role in an economy. In addition, classical economics assumes that we always have all the information relevant to a decision and that we are then able to use this information to calculate a value for each option we are faced with. But such conditions are hardly ever given: when do we already know all the information and even if: do we succeed in such a cool calculation? Doesn't our subconscious always thwart our plans, doesn't our gut feeling weight one piece of information more strongly than another?
A relatively young branch of economics - behavioral economics - is now using experiments to find out how people really make their decisions - be it when looking for a job, when shopping or when it comes to choosing a partner. One of those behavioral economists is Dan Ariely, who in his book has the provocative title Thinking helps, but is of no use describes a plethora of situations in which we exhibit irrational economic behavior. And Ariely shows that we not only act irrationally, but also act in a highly predictable manner in our irrationality. Errors are not random, they follow a pattern.
Marketing has been taking advantage of this fact for years, for example by relying on the miraculous effects of free products. People are so fixated on being given something that all rational decision-making is suspended and any disadvantages associated with the offer are no longer taken into account at all. Even when comparing products, people are easy to influence. By no means do we always choose the cheaper alternative, but fall for false comparisons in advertising that suggests that a certain option is the cheaper one. Ariely investigates the reasons for our irrational behavior and thereby builds a bridge between psychology and economics.
Dan Ariely shows that people keep making the same mistakes without learning much from them. We ourselves think we are rational beings and we are repeatedly treated as such. However: Wouldn't it be more sensible, Ariely asks, if economics were based on how people actually behave and not on how they should behave? Knowing that our irrationality reveals itself in the same way over and over again can be the starting point for better decision-making.
Dan Ariely doesn't deny that we have a rational self, but it's not the only one - nor is it used very often. Ariely draws a person made up of different versions. Under certain conditions, a very specific version takes over the helm. The behavioral economist turns the previously valid idea on its head: We are not cool calculators who always make decisions based on their own interests and in some cases deviate from this standard. For Ariely, it's the other way around: we behave insane and, under very specific conditions, we sometimes behave rationally.
It goes to Ariely in Thinking helps, but is of no use It is about replacing the model of the rational human being with one that, closer to reality, includes the actual laws that influence human action. Dan Ariely presents his examples and arguments in clear language, he is entertaining to read, the experiments described are easy to understand and Ariely does not just stop at listing examples of irrational behavior and finding explanations for them: he points to each the importance for society and social action. Among the plethora of behavioral economics books that are currently flooding the book market, Ariely's work stands out for its wit and clarity.
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