10 Reasons Why People Make Stupid Decisions...

10. I’ve come so far already… (invested cost bias) - We all know that the past is past and we can’t get back money or time that we already spent. But many people irrationally take sunk costs, time, money, or other resources which have already been spent and can't be recovered, into their decision making; such as how much you spent to get your car fixed last time, how long you have been dating someone (ask Krupa), how much you invested in a stock, or how many troops have been lost in Iraq so far. Why not just a little more? :-)

9. Me me me! (egocentric bias) - Putting yourself in another person’s shoes is harder than it sounds for most people. My friend Ketaki would be the best person to testify this. But nevertheless, I'll mention a scientific study: Two volunteers, at a London college, were connected to a device that allowed each of them to exert pressure on the other’s fingers. The researcher began by exerting a fixed amount of pressure on the first volunteer’s finger. The first volunteer was then asked to exert the same pressure on the second volunteer’s finger. The second volunteer was then asked to exert the same amount of pressure on the first volunteer’s finger, and so on. Although volunteers tried to respond with equal force, they typically responded with about 40 percent more force than they had just experienced. Each time a volunteer was touched, he touched back harder, which led the other volunteer to touch back even harder. When asked about it, both volunteers claimed to have exerted the same pressure in all attempts!! :-)

8. That just proves my point. (confirmation bias) - Isn't it a coincidence that no matter what happens in the world, some people can spin it to show why that confirms their opinions? (Like when Janki says "EXACTLY!" after whatever the incident!)

7. That’s easy. (overconfidence) - According to an AZ-MVD survey conducted 2001, 80% of respondents rated themselves in the top 20% of all drivers. My friend Shivam, the self proclaimed "most awesomest" driver has lost, what...ummm...pbb..pbb..pbb...about $300 on speeding, parking and other traffic violations, and on avoidable car damages!! While overconfidence is definitely a good thing in many situations, it probably means people don't work on their weaknesses as much as they should. Do overconfident drivers practice safe driving given their lack of abilities? Do overconfident public officials realize when they are making bad foreign policy decisions?

6. I’m #1! I’m #1! (dysfunctional competition) - People's happiness is often a function of what they have relative to others. You might be just as happy with your co-workers getting a pay cut, as you would with getting a raise yourself. Ask Sameer Raut! :-)

5. Mine mine mine! (endowment effect) - Why is it so hard for people to throw, give away or sell things that are past their prime? One theory is that people tend to place a higher value on objects they own relative to objects they do not. A study revealed that randomly assigned owners demanded to be paid around $7 for their coffee mug, while randomly assigned buyers were only willing to pay around $3. That also explains why my room-mate Arjun refuses to donate, let alone throw away, his old clothes (esp. the green shirt and jeans), and other random things which he really doesn't need.

4. Its gonna happen!!!! *PANIC* (recent-event bias) - People are suckers for recent, memorable and hyped-up events. So much so, that they think these types of events are more likely to happen than they actually are. Despite the focus that terrorism has gotten in the past several years, the risk of dying from terrorism is very low compared to much more mundane ways to die such as driving off the road (80 times more likely to kill you) or even a hernia (5 times more likely to kill you). And yes, there's no need to fear flying on an airplane, seated next to a guy with a thick beard. There's more likelihood of you getting shot by your schizophrenic nephew on your way home from the airport. Well, if the world has limited resources to invest, where do you think people are going to want to spend it? Stopping the slow and steady march of global warming that won't affect any of us during our lifetimes? Or more REAL threats like terrorism, which can kill many today? (I can bet my girlfriend Nikita would still opt for Global Warming...she wouldn't give a damn if Ali-Jabber Hassan kidnaps me and beheads me in some cave in Afghanistan)

3. If everybody else think so… (bandwagon/conformity) - People make decisions based on what they think, right? Well, not all of us (Rijuta, Debolina, Janki, Neeharika, Rachna, Ketaki, Sapna, Sharan, etc...hmmm...i noticed all are girls...any co-relation?) !! In a famous experiment by Solomon Asch, several experimenters in disguise were to answer the question "Which U.S. State is the farthest north? South? East? West?" on an internet forum. The experimenters in disguise were instructed to give incorrect answers to these easy questions on the first few posts itself. Surprisingly, half of the respondents gave wrong answers because of the pressure of their peers. Even more surprising was the fact that this being an internet forum, the "peer" were people who the respondents had never seen or known ever before!! Are these types of pressures enough to get people to do things that they know are wrong, or just do not wish to do (partying, drinking, smoking, sex, studying, shopping, hiking, gym, etc.)?

2. Lets go hard 8! (illusion of control) - We all know that there’s no difference between my chances of getting a 6 if I roll the dice or someone else at the table does, right? Explain that to my friend Yogesh who was persistant on rolling the dice himself when we were playing Monopoly. You throwing the dice wouldn't make you any luckier!!! Your hands are not magical!!! You don't control everything that you do!! Also explain that to Krupa and Nikita who think that things will fall into place without planning, preparation and effort.

1. He's just a moron. (attribution error) - Is the driver that cut you off a jerk? Or is he a good guy who didn't see you because he's distracted by something else going on in his life. Judging by the finger that you chose to hold up, you think he's a jerk. That's about par for the course, as most people tend to over-emphasize personality-based explanations for the actions of others. A NewYorker article by James Surowiecki discusses a classic experiement where "subjects shown a person shooting a basketball in a gym with poor lighting and another person shooting a basketball in a gym with excellent lighting assume that the second person hit more shots because he was a better player." So maybe it's better to withhold judgement about a person until you've actually talked to them. Even if they did cut in front of you in line at McDonalds. Finally something that applies to me everyone !! :-)