It is true that from a behavioral economics perspective we are fallible, easily confused, not that smart, and often irrational. We are more like Homer Simpson than Superman. So from this perspective it is rather depressing. But at the same time there is also a silver lining. There are free lunches!
The problem with opportunity cost is that opportunity cost is divided among many, many things.
We need to believe that we’re good people, and we’ll do just about anything to maintain that perception.
Because cheating is easier when we can justify our behavior, people often cheat in small amounts: We can come up with an excuse for stealing Post-It notes, but it is much more difficult to come up with an excuse for taking $10,000 from petty cash.
With everything you do, in fact, you should train yourself to question your repeated behaviors.
It is very difficult to make really big, important, life-changing decisions because we are all susceptible to a formidable array of decision biases. There are more of them than we realize, and they come to visit us more often than we like to admit.
But suppose we are nothing more than the sum of our first, naive, random behaviors. What then?
That’s a lesson we can all learn: the more we have, the more we want. And the only cure is to break the cycle of relativity.
When people are in severe pain, there’s an expression, you’re a “pain person,” and what that means is that nothing else matters.
We have very strong intuitions about all kinds of things – our own ability, how the economy works, how we should pay school teachers. But unless we start testing those intuitions, we’re not going to do better.
The more cashless our society becomes, the more our moral compass slips.
When you’re in pain, tomorrow doesn’t exist – just the pain – and the only thing that you want in the world is for it to go away.
Thinking is difficult and sometimes unpleasant.
In life we encounter many people who, in some way or another, try to tattoo our faces.
The problem is that people basically dangle debt in front of us. And the cost for the poor of course is much higher than for the wealthy.
Disasters are usually a good time to re-examine what we’ve done so far, what mistakes we’ve made, and what improvements should come next.
In a world where everyone is behaving honestly, any dishonesty constitutes a big infraction. But, in a world where many people are behaving dishonestly, and the news is filled with stories of their infractions, even big infractions can feel small to the perpetrator.
It is helpful to think of people as having two fundamental motivations: the desire to see ourselves as honest, good people, and the desire to gain the benefits that come from cheating – on our taxes or on the football field.
While we somehow understand revenge on an intuitive level between individuals, I do suspect that companies, assuming that people are rational, completely miss and underestimate the motivation people have for revenge.
Imagine you owe on five credit cards, you owe five debts. So which debt should you pay first? And the answer is very simple: You should pay the one with the highest interest rate first. But that’s not what people do.