One of the first things I was taught in my IB economics higher level course when I started last year was that economic theories and models are based off of the assumption that human beings are rational decision makers. But what if I told you that this economic premise was wrong? That human beings are actually irrational decision makers.
Believe it or not, that’s exactly what Dan Hanenam’s and Amos Tversky did. They won a Nobel Prize for conducting research that brought an end to rational economics. They discovered that human beings are pretty irrational people, and this is because our minds are stimulated by cognitive biases that prevent us from making rational decisions.
In fact, our decision making can be separated into two systems.
Believe it or not, that’s exactly what Dan Hanenam’s and Amos Tversky did. They won a Nobel Prize for conducting research that brought an end to rational economics. They discovered that human beings are pretty irrational people, and this is because our minds are stimulated by cognitive biases that prevent us from making rational decisions.
In fact, our decision making can be separated into two systems.
The first is the logical and analytical system. This is the side of our brain that is capable of making rationale decisions which we are aware of, but it uses up a lot of energy, and is actually very lazy. | The second is the intuitive, fast, and automatic system, which is so powerful that it is responsible for most of the things we say, do, think, and believe, without us even knowing that it is happening. |
As creepy as it may sound, most of our beliefs or opinions come from an automatic response, from System 2, but then our logical mind, System 1, invents a reason as to why we think or believe this.
These automatic responses are influenced by cognitive biases, which in simple terms are tendencies to think in certain ways, they’re “systematic deviations from a standard of rationality or good judgment”.
The cognitive bias that I could most relate to is the present bias, which is the belief that human beings have the propensity to make decisions based off of what is happening in the present moment, without worrying about the future.
And this is something that I do, a lot. I have the tendency to take on too much, more than I can usually handle because I find it very hard to say no. As I talked about in a previous blog entry, my fear of no comes from a deeper fear of rejection and confrontation. Therefore, whenever a situation comes about, my cognitive present bias kicks in, and I say yes to what I'm asked because I find it easier to say yes than to experience the guilt of having said no. The problem is that I rarely stop to think about the long term effects of having said yes: the lack of sleep, spreading myself to thin, the immense stress that I put myself into, etc.
These automatic responses are influenced by cognitive biases, which in simple terms are tendencies to think in certain ways, they’re “systematic deviations from a standard of rationality or good judgment”.
The cognitive bias that I could most relate to is the present bias, which is the belief that human beings have the propensity to make decisions based off of what is happening in the present moment, without worrying about the future.
And this is something that I do, a lot. I have the tendency to take on too much, more than I can usually handle because I find it very hard to say no. As I talked about in a previous blog entry, my fear of no comes from a deeper fear of rejection and confrontation. Therefore, whenever a situation comes about, my cognitive present bias kicks in, and I say yes to what I'm asked because I find it easier to say yes than to experience the guilt of having said no. The problem is that I rarely stop to think about the long term effects of having said yes: the lack of sleep, spreading myself to thin, the immense stress that I put myself into, etc.
Being the director of culture for Blendz this past semester has taught me that being able to say no and knowing when to say no - in other words challenging others effectively - is extremely important in any leadership position. "No" can be difficult to implement if you´re worried more about the immediate reaction of the person being challenged rather than the benefit it may have for them in the long run.
Think about it. Aren't some of the people you respect the most your parents, best friends, family members? They're the people who tell you the truth when you need to hear it. And although hearing the truth, or being challenged, may make you mad at the beginning, eventually, this anger becomes respect because you recognize that these people challenge us because they care about us, because they know it's in our best self-interest.
So I think what I’ve started to understand, started to unravel, is that I don’t want to become someone that focuses solemnly on themselves. I want to remain someone that gives to others without expecting anything in return, but I want to have a greater courage to challenge others. And the way I can do this is by recognizing that challenging them is ultimately a way of giving more to them and helping them grow.
Think about it. Aren't some of the people you respect the most your parents, best friends, family members? They're the people who tell you the truth when you need to hear it. And although hearing the truth, or being challenged, may make you mad at the beginning, eventually, this anger becomes respect because you recognize that these people challenge us because they care about us, because they know it's in our best self-interest.
So I think what I’ve started to understand, started to unravel, is that I don’t want to become someone that focuses solemnly on themselves. I want to remain someone that gives to others without expecting anything in return, but I want to have a greater courage to challenge others. And the way I can do this is by recognizing that challenging them is ultimately a way of giving more to them and helping them grow.