The real problem of humanity is the following: we have paleolithic emotions, medieval institutions and god-like technology.1 — E. O. Wilson
No matter how hard we try to make pure and sound choices, human nature always interferes. Being aware of ourselves and our irrationality is the first step to improve our decision-making.
In my case, I got interested in Behavioral Economics for two reasons:
- Decision-making frazzles me.
- I procrastinate a lot.
I had a normal childhood. I was raised to study hard, follow rules and obey authorities. The choices my parents made in small yet everyday situations were enough for me: the clothes I wear, the food I consume, and even to political leanings.
With this structured upbringing, I should be used to the prim and proper—now that I'm an adult. But that's not really the case.
Thanks to the freedom of adulthood, I often find myself in a paradox of choice. I spend long hours shopping and end up buying some fluff I don't need or never intend to buy. I buy a lot of books that just collect dust at home and subscribe to multiple online courses I never get to start.
Not to mention, I eat bad food when I get home tired from work. The information overload around social media has made me more confused about what's going on around.
I try to exit the paradox by simply accumulating more. I buy a lot for instant happiness, eat a lot to quickly satisfy my hunger, and browse a lot to quickly satiate my curiosity.
Laziness and procrastination justify the lack of follow-through and evaluation of my actions.
(Shame to say, it took me months of delaying tactics before I write another entry on this blog.)
I ask myself: Is this who I really am, or is this tendency part of human nature?
First encounter with Behavioral Economics
Questions like these piqued my interest in Behavioral Economics, a new subfield, or extension of economics that uses psychology to explain how humans make economic decisions. Economic decisions are made in buying and selling goods and services that are bound to be limited.
I started pursuing this interest by taking Dan Ariely's "A Beginner's Guide to Irrational Behavior" class in Coursera two years ago (Sadly the class is now defunct).
Eventually, I began reading books and research papers on human behavior (I will post my recommendations soon; but for the mean time, here's my Goodreads page).
Based on my initial readings, people tend to find the easier way out to save energy. Seeking instant gratification consumes less energy than committing to work for long-term benefits.
Since focusing on long-term benefits is not our natural tendency, we need to be more carefully examine the cases in which we repeatedly fail, and try to come up with some remedies for these situations.2
What’s amusing about Behavioral Economics is it borrows the assumption of psychology that human beings have a tendency to be irrational.
To quote Dan Ariely:
My further observation is that we are not only irrational but predictably irrational—that our irrationality happens the same way again and again.
Whether we are acting as consumers, businesspeople or policy makers, understanding how we are predictably irrational provides a starting point for improving our decision making and changing the way we live for the better.2
Adulthood offers me freedom to choose from a plethora of options I face everyday. My competitive self is nudging me to be great at it, especially now that I'm getting older.
Knowing how I roll, I still need a framework to guide me in making better decisions and managing my irrational self.
I have always been enamored by the capability of social sciences to unravel the mysteries of human nature. I personally find excitement in studying economics and psychology in one, cohesive field.
"An Intellectual Entente." Harvard Magazine. N.p., 11 Sept. 2009. Web. 20 Mar. 2017. http://harvardmagazine.com/breaking-news/james-watson-edward-o-wilson-intellectual-entente. ↩
"Introduction" Predictably Irrational: The Hidden Forces That Shape Our Decisions. New York, NY: HarperCollins, 2009. N. pag. Print. ↩