{"id":33283,"date":"2021-04-23T16:54:48","date_gmt":"2021-04-23T20:54:48","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=33283"},"modified":"2021-04-29T21:29:08","modified_gmt":"2021-04-30T01:29:08","slug":"how-do-we-make-decisions","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/how-do-we-make-decisions\/","title":{"rendered":"How Do We Make Decisions? Mostly Irrationally"},"content":{"rendered":"\n<p>How do we make decisions? What factors influence our <a href=\"https:\/\/www.shortform.com\/blog\/methods-of-decision-making-crucial-conversations\/\">decision-making<\/a> process? Are our decisions rational?<\/p>\n\n\n\n<p>In the book <em>Predictably Irrational, <\/em>author Dan Ariely explains that humans make <a href=\"https:\/\/www.shortform.com\/blog\/humans-are-irrational\/\">irrational decisions<\/a> that are so predictable that they are often taken advantage of by society, especially the marketing industry. He also explains how relativity makes decisions for you.<\/p>\n\n\n\n<p>Keep reading to learn the psychology behind how we make decisions.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How We Make Decisions<\/strong><\/h2>\n\n\n\n<p>How do we make decisions? Well, the standard economic model that our world operates on is based on the idea that humans are rational creatures. This model assumes that when you\u2019re presented with options or a decision to make, you\u2019ll carefully weigh the benefits and drawbacks of each of your options, and choose the best possible outcome for yourself.&nbsp;<\/p>\n\n\n\n<p>Furthermore, this model dictates that in the case you <em>do<\/em> act irrationally and make a poor decision, the flaw of your decision will be quickly revealed to you, you\u2019ll realize your mistake, and you\u2019ll avoid making the same mistake again in the future.&nbsp;<\/p>\n\n\n\n<p><strong>Behavioral economics, on the other hand, argues that humans are systematically irrational, often don\u2019t recognize their mistakes, and don\u2019t learn to <a href=\"https:\/\/www.shortform.com\/blog\/make-better-decisions\/\">make better decisions<\/a>.&nbsp;<\/strong><\/p>\n\n\n\n<p>The emerging discipline of behavioral economics pushes against the standard economic model and seeks to understand why humans so frequently depart from perfect reasoning skills and how our everyday environments are used to influence and shape irrational behaviors and decisions.&nbsp;<\/p>\n\n\n\n<p>Both experiments and real-life scenarios consistently reveal a significant quirk of human nature\u2014we\u2019re not only irrational but <em>predictably<\/em> so. Because we\u2019re not conscious of when or why our decisions are irrational, we fail to correct our mistakes. Instead, we continue to repeat the same mistakes in such a predictable way that our irrational line of thinking can be <em>used against us<\/em>\u2014by marketing agencies, employers, or even your real estate agent.&nbsp;<\/p>\n\n\n\n<p>The good news is, it doesn\u2019t need to be this way. In the book <em>Predictably Irrational<\/em>, Duke behavioral economist and best-selling author Dan Ariely untangles the common pitfalls of human logic and explores the forces that <em>really<\/em> drive your actions.<strong> Armed with this knowledge and awareness, you can consciously avoid the traps of irrationality and <a href=\"https:\/\/www.shortform.com\/blog\/how-to-improve-decision-making\/\">improve your decision-making<\/a> skills to act in ways more beneficial to you.&nbsp;<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How Relativity Makes Decisions For You&nbsp;<\/strong><\/h3>\n\n\n\n<p>It\u2019s human nature to make constant comparisons in an effort to find guidance toward the \u201cright\u201d choice. This is why, as a general rule, people can\u2019t pinpoint what they want until they see someone else with it. For example, if you were asked to shop for headphones, it\u2019s likely you wouldn\u2019t know exactly what to look for because you don\u2019t know what makes for \u201cgood\u201d headphones. However, if you spotted someone wearing a really sleek pair of headphones, you\u2019d likely want to buy similar ones. Because someone else has those headphones, we assume that they\u2019re a good choice.&nbsp;<\/p>\n\n\n\n<p>Because of our need for guidance, relativity has a powerful influence on how we make decisions. Humans don\u2019t have an inherent sense of the value of things or what the right decision is. Instead, we resort to surmising the value of an item by considering its relative advantage or disadvantage over another. However, these value-determining comparisons are often set up for us in a way that leads us to irrational choices.&nbsp;<\/p>\n\n\n\n<p><strong>An awareness of how we rely on relativity to make decisions is important because it influences all parts of your life\u2014where and how you spend your money, how you choose who to date, and how satisfied you are with your life.&nbsp;<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>How do we make decisions? What factors influence our decision-making process? Are our decisions rational? In the book Predictably Irrational, author Dan Ariely explains that humans make irrational decisions that are so predictable that they are often taken advantage of by society, especially the marketing industry. He also explains how relativity makes decisions for you. Keep reading to learn the psychology behind how we make decisions.<\/p>\n","protected":false},"author":8,"featured_media":33286,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9,24],"tags":[270],"class_list":["post-33283","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-psychology","category-society","tag-predictably-irrational","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Do We Make Decisions? Mostly Irrationally - Shortform Books<\/title>\n<meta name=\"description\" content=\"Do you believe you&#039;re in control of your decisions? Behavioral economist Dan Ariely says you&#039;re not. But you can be. Learn more here.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/how-do-we-make-decisions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Do We Make Decisions? Mostly Irrationally\" \/>\n<meta property=\"og:description\" content=\"Do you believe you&#039;re in control of your decisions? Behavioral economist Dan Ariely says you&#039;re not. But you can be. 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