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Financial Decoder

Can the Olympics Teach Us About Our Own Behavior?

Jul 22, 2024
Discover how decision-making biases impact Olympic host city selection, judging athletes, and audience support for underdogs. Learn about emotional responses of Olympic medalists and lessons from past mistakes in bid strategies. Explore parallels to financial decision-making in daily life.
17:42

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Quick takeaways

  • Plan major life events meticulously to avoid over-optimism and plan for failures.
  • Be aware of biases in judgment processes when making financial decisions to ensure objectivity and accuracy.

Deep dives

The Planning Fallacy in Olympic Host City Selection

The process of selecting host cities for the Olympics involves euphoria upon selection followed by immense planning challenges. Over-optimism and lack of contingencies lead to late, over-budget projects with reduced functionality, known as the planning fallacy. With cost overruns averaging 252% since 1976, host cities face financial burdens for decades. Learning from this, individuals should plan major life events meticulously, considering possible failures and seeking critical feedback.

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