I was reading this great book, and I found out something which may be useful for economists: that moment when you make a decision among close alternatives, is purely emotional. This is what the book has to say:
It’s purely emotional, the moment you pick. People with brain damage to their emotional centers who have been rendered into Spock-like beings of pure logic find it impossible to decide things as simple as which brand of cereal to buy. They stand transfixed in the aisle, contemplating every element of their potential decision—the calories, the shapes, the net weight—everything. They can’t pick because they have no emotional connection to anything
This is why companies are now starting to limit the variety in their product lines (the consummate example being Apple, of course), because it makes it easier to make an emotional connection and create post-hoc rationalizations about your choice. It may seem a little manipulative but this decision-making heuristic makes our lives easier; one just has to realize their cognitive biases.
It’s quite in line with the bounded rationality of behavioral economics; that people make choices rationally but only up to the extent of what they know and how they think. If this interests you, Predictibly Irrational and other books by Ariely are great reads.
Sometimes the noise is more important than the signal.
On Interest Rates and Mortality
A limited time on this earth makes time precious.
On Video: Trial & Error and the God Complex
It seems so obvious when you listen to him, but it’s when you look around and see everyone trying to fix the world’s problems with their own preconceived master plans that you see how few people grasp the beautiful heuristic process of variation and selection.