We frequently make bad decisions because of the way we compare things. You’re offered a three-year job, and have your choice of two salary plans:
Most people would rather get yearly raises, even if it means making less overall.
Many of us are convinced that we always get stuck in the slowest checkout line at the grocery store, and that if we make a break for it and change to another line, that one will magically slow down and the one we were in originally will speed up. Of course, the distribution of instances between us getting in the fast and slow lines is even, and bad karma has nothing to do with it. But the experience of being in the fast line causes no stress and no memory. It’s barely an experience at all.
SXSW podcasts are now online, so we can catch up on missed sessions (subscription feed). Harvard professor Daniel Gilbert’s How To Do Precisely the Right Thing At All Possible Times is an absolutely fascinating exploration of the power of comparison in context to mislead our brains, and of the influences we draw from repeated exposure to certain kinds of stimuli, which in turn cause us to draw faulty mental maps and reach incorrect conclusions. Sounds airy, but the talk is packed with concrete examples.
Our perception of value is usually based on comparison, rather than on inherent value. When buying a car, one might opt to pay the extra $300 for the better stereo without blinking, even though we could drive across town and get the same stereo for $100. If we weren’t buying a new car, of course we would drive across town to save $200. But we stupidly judge the value of the stereo relative to the purchase price of the car, not to itself. This drives economists crazy.
Anyway, the MP3 encoding on the SXSW podcasts is unfortunately terrible, but the Gilbert presentation is a gas.
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