Apes Make Irrational Economic Decisions – That Includes You

By Christopher Krupenye – These irrational biases are common, they’re really hard to overcome, and they have pervasive impacts on human market behavior.

For example, people are more likely to spend a sum of money when it is framed as a bonus than when it is framed as compensation for a previous loss, like a rebate, which has implications for population trends in spending versus saving.

Framing also influences people’s medical decisions, such as their tendency to undertake preventative measures in personal health care.

And it’s often leveraged by marketing agencies to improve sales.

Decision-making research can help economic institutions – built on the erroneous assumption that people will behave rationally – to account for predictable irrationality.

It can also help us to design choice environments that lead people to make decisions that are better for them. For these reasons, Daniel Kahneman [2, 3, 4] was awarded the Nobel Prize in Economics in 2002, for his contributions (with the late Amos Tversky [2, 3, 4]) to the understanding of irrational decision-making. more> http://goo.gl/q04Rve

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