The Next Big Idea Daily Stop Trying to Optimize Your Life
13 snips
Oct 27, 2025 Explore the limitations of rational choice theory and how it impacts our decision-making. Discover how behavioral economics reveals our biases and the dangers of relying solely on numerical data. Hear examples from Vietnam and college rankings that illustrate how metrics can mislead us. Ultimately, learn that wisdom and judgment are essential to making sound decisions, emphasizing that not every choice should be reduced to calculations.
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Decisions Aren't Casino Bets
- Rational choice theory treats decisions like casino bets: evaluate value and probability, multiply to get expected utility.
- The model assumes all options and attributes can be quantified and compared on a common scale, which is often false.
Fast Intuition Vs Slow Deliberation
- Kahneman and Tversky showed people systematically deviate from rational choice using heuristics and biases.
- Automatic, fast processes often deliver answers before deliberate thinking and can mislead judgment.
Counting Replaces Judgment
- Relying on spreadsheets substitutes counting for judgment and narrows thinking about what matters.
- Quantifying everything pressures us to ignore hard-to-measure values that shape good decisions.
