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!
Interpretation
Humans are often flawed in their decision-making, but there are also unexpected benefits to this fallibility.
Dan Ariely's quote highlights the common limitations of human rationality, suggesting that we often make decisions based on confusion and ignorance rather than logic. Despite these shortcomings, there is a positive aspect to our behavior: the chance to find unexpected opportunities or 'free lunches' that arise from our imperfect nature.
In practice
In a discussion about the shortcomings of human decision-making in economics.
To summarize, using money to motivate people can be a double-edged sword. For tasks that require cognitive ability, low to moderate performance-based incentives can help. But when the incentive level is very high, it can command too much attention and thereby distract the person’s mind with thoughts about the reward. This can create stress and ultimately reduce the level of performance.
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.
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.
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.
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.
The most difficult thing is to recognize that sometimes we too are blinded by our own incentives. Because we don’t see how our conflicts of interest work on us.
An inch of time on the sundial is worth more than a foot of jade.
The Ego is an exquisite instrument. Enjoy it, use it--just don't get lost in it.
The Bible is a great source of wisdom and consolation and should be read frequently.
People are at their most mindful when they are at play. If we find ways of enjoying our work blurring the lines between work and play the gains will be greater.
Incestuous, homogeneous fiefdoms of self-proclaimed expertise are always rank-closing and mutually self-defending, above all else.
As a rule, men worry more about what they can't see than about what they can.
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