The Rational Reminder Podcast

Episode 266: Prof. Cass Sunstein: Practical Reason in Ordinary Life

Aug 17, 2023

01:07:11

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Prof. Cass Sunstein, founder of the Program on Behavioral Economics and Public Policy at Harvard Law School, discusses decision-making. Topics include second-order thinking, delegation vs algorithms, transformative decisions, preferences for seeking information, biases in belief updating, maximizing well-being, and the differences between manipulation and nudges.

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Quick takeaways

Understanding the nuances of decision-making can help us make more informed choices.

Second-order decisions involve consciously choosing or developing patterns for decision-making.

Seeking information and delegating decisions can significantly influence decision outcomes.

Deep dives

Decision making and the importance of introspection

When it comes to decision making, it can be challenging to understand why people make certain choices. Often, introspection may not provide clear insights into the factors influencing our decisions. For example, external factors such as the weather or our moods can subtly impact our choices, even if we are not consciously aware of it. Understanding these nuances can help us make more informed decisions.

Difference between choosing and picking

00:57

Introduction

4min

Second Order Decisions: Simplifying Life

8min

Delegation and Trust: Humans vs. Algorithms

5min

Making Transformative Decisions: Maximizing vs. Going for It

5min

People's Preferences for Seeking and Avoiding Information

5min

Belief Updating and Biases

21min

Maximizing Well-Being and the Role of Algorithms

13min

Exploring Manipulation and Nudges

6min

We make countless decisions throughout our lives that range from the mundane to the monumental. But how do you decide how you decide? That is the fundamental question in our esteemed guest, Cass R. Sunstein’s new book Decisions about Decisions: Practical Reason in Ordinary Life. Cass currently serves as the Robert Walmsley University Professor at Harvard University and is the founder and director of the Program on Behavioral Economics and Public Policy at Harvard Law School. He is also a prolific author, with one of his most notable works being the hugely popular and impactful book, Nudge: Improving Decisions about Health, Wealth, and Happiness, which he co-wrote with Richard Thaler in 2008. In today's conversation, we sit down with Cass to discuss the difficulties inherent to understanding why people make the decisions they make and what the latest research teaches us about how we should approach decision-making to maximize our well-being. Cass provides insight into second-order thinking strategies, the difference between picking and choosing, and why delegating a particular decision is sometimes the right call. We also unpack what to consider when making major life choices, the strengths and weaknesses of algorithms when it comes to decision-making, and much more. To hear Cass’s many insights on the topic of behaviour, knowledge, and decision-making, be sure to tune in!

Key Points From This Episode:

The challenges of understanding why people make the decisions that they make. (0:03:38)
Second-order decisions and why they are sometimes preferable to on-the-spot decisions. (0:04:50)
An overview of various second-order decision strategies. (0:06:45)
Guidelines to help you choose which decisions to delegate and how to determine whether you have a trustworthy delegate. (0:11:28)
What to consider when making a transformative and irrevocable life decision. (0:16:07)
Why people avoid seeking out information that might make them feel bad, even if it could help them make better decisions. (0:21:29)
How people decide what information to believe and when to update their beliefs. (0:28:01)
Asymmetries in how we update our beliefs and factors that can deter people from updating their beliefs when faced with new evidence. (0:32:28)
How joint evaluation and separate evaluation influences your decision making and which one you should use depending on the context. (0:43:12)
Insights on well-being and what to value when you’re making everyday decisions. (0:48:14)
The strengths and weaknesses of algorithms when it comes to making decisions and what we gain when we make decisions ourselves. (0:52:38)
Examples of when using algorithms can be harmful or dangerous. (0:59:25)
How our decisions can be manipulated and the importance of doing due diligence. (01:01:30)
Cass’s well-known work on nudges and how nudges differ from manipulation. (01:02:59)
Happiness, meaning, variety, and how Cass defines success in life. (1:05:50)