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Irrational Beliefs and Happiness

Reconciling our Irrational Beliefs with Happiness 

 

happiness
Irrational beliefs and happiness

 

One of the central questions to life is: How can be happy? That’s not a straightforward question, of course. What does it mean to be happy? How do we reconcile our irrational beliefs with our desire to be happy? And what exactly is our definition of happiness?

Dan Gilbert, a Harvard Psychologist, gave a Ted Talk about happiness.  He claims that a few hundred years ago, the mathematician Bernoulli gave us a “gift”: an equation that could help us better understand how to be happy. 

The expected value of any of your actions is equal to the odds of success multiplied by the value of your gains. But this “gift” is mostly useless since in real-life situations, human beings are notoriously bad at figuring out what the odds are and what the value of their gains will be.  Unlike artificial settings such as a casino where the odds are knowable and the value of your gains are easily calculated; real-life scenarios often fool you into making inaccurate assessments of probabilities and value.

Probabilities

An experiment he refers to – that was actually designed by Kahneman and Tversky – asks people to guess if there are 1) more words that start with the letter k than there are b) words that have the letter k in the third position? The correct answer is b). Most people answer a) because of the availability bias. You find it a lot easier to recall words that start with the letter k than think of words where k is in different positions. It’s the reason why the dictionary is easy to use.

Deadliest Events

Another experiment that demonstrates the problem of availability bias asks people to estimate which event is most likely to kill people:

a) Tornados b) Fireworks c) Drowning d) Asma

Most people underestimated the odds of dying from drowning and asthma while overestimating the odds of dying from tornados and fireworks. Why? Well, what gets covered on the news more often? We rarely see headlines of people dying from asthma or drowning because they’re not dramatic. But fireworks and tornados gets people’s attention – and are routinely covered on the news. Because of the higher availability of memories that relate to tornados and fireworks we tend to overestimate how often they occur.

Lottery Joy

The odds of winning the lottery is almost zero. Any rational person – according to Dan – should never bother buying a ticket in their life. They might as well flush the money down the toilet. But people routinely buy tickets all the time. Dan again explains this with the problem of availability bias. Since losers of the lottery never get any coverage on the news – or pictures taken with famous celebrities – we have no recollection of those events. However, we’ve seen countless examples of lottery winners over the years – on front page headlines smiling with an oversized check obscuring half their bodies. But if we were to change reality for a minute and give an equal amount of media coverage to lottery winners and losers – fewer people would play the lottery. Since availability bias is no longer in play (it gets canceled out with the other side of the story) people will finally get disillusioned and look for a new pass time.

But – after Gilbert’s talk – an audience member (who coincidently had interviewed thousands of lottery winners) told Gilbert he was wrong. That people don’t play the lottery because they think they’re going to win. That’s just what the dumb economists think (Dan mentioned how economists are rightly outraged at the irrationality of people who try playing the lottery), and that – in fact – there’s another reason why people play the lottery. The pleasure they get from the anticipation of the lottery – leading up to the draw – is what motivates them to buy the ticket. That’s in no way equivalent to flushing money down the toilet – which would yield no pleasure at all (and likely a hurried phone call to the neighborhood plumber). Gilbert’s response was that – while that was a valid point – you still had to weigh the joy of anticipation with the feeling of agony a lottery player feels after finding out he lost. After-all, people who never play the lottery at all never feel bad about losing.

I think the amount wagered – relative to someone’s wealth matters a lot here. If you’re wagering a large amount of money on the lottery every year – Dan would be right to laugh at you with his economist friends. You’re probably going to regret losing that money. But if you’re investing a minimum amount to make your week a little more exciting – then it’s not such a stupid thing to do.

Estimating value

Now for the second variable in Bernoulli’s equation: value. Dan leads out with a question: Is a Big Mac worth 25 dollars to you?

If you’re like most people – you’d probably say no. But think about context. What if you were on a 9-hour flight and you knew you weren’t going to be served any food. And it just so happens that the person in front of you has a nice, hot Big Mac untouched. And you’re really hungry. Wouldn’t you gladly part with your 25 dollars then? On the other hand, if you were in a country where you had access to great food for very little money, then 25 dollars for a Big Mac would look like a silly decision. Dan’s point is that instead of taking context into consideration – people tend to think of the past as a benchmark. If they had gotten used to buying Big Mac’s for a fifth of the price – then the 25 dollar price tag must be expensive. Another logical error.

Changing Wages

Our tendency to make comparisons to the past has allowed marketers to trick us by displaying a crossed out “used to be” price tag. In another experiment, people were asked to choose between two scenarios.

  1. Work for a wage that gradually increases every year for a total amount X after several years.
  2. Work for a wage that gradually decreases every year for a total amount X after several years.

Because people tend to compare things to the past – scenario number one was more desirable. But Dan objects again. Afterall, if you were making the same amount of money – why would you care if your wage was increasing or decreasing? Another case of irrationality.

I would object to Dan’s objection here. We aren’t computers. Value for us isn’t determined by some fixed number on a screen. Seeing our wage go up year after year would probably boost our self-esteem, give us a sense of progress, and motivate us to work harder. Psychologically, it is more superior than experiencing the dread of seeing our wages fall across time. But Dan – the psychologist (from Harvard) – misses that point.

Moving on.

Comparing to the Possible

The Bottle in the Middle

Retailers take advantage of us in many ways. One of the ways is how they stack items. When a bottle of wine is positioned next to a really expensive bottle and a really cheap bottle – it’s more likely to get purchased since people perceive it as the cheapest but best alternative. However, when they take the bottle back home, that brief comparison they made doesn’t matter anymore.

Potato Chips vs Godiva Chocolates

An experiment was designed to see whether people would have a different experience eating potato chips if the context was slightly altered. In one case, a box of Godiva chocolates was placed in front of them while in the second case a can of spam was placed there instead. Clearly, it should make no difference what object would be placed in front of us since Potato chips taste the same. But most people rated their experience of the potato chips as better when there was a can of spam in front of them. What does Gilbert think of this? You guessed it. Humans are stupid.

Gilbert makes some interesting points throughout the talk but there are some real deductive errors that he seems (amazingly) oblivious to. For one thing, there’s no reason to think that people were behaving irrationally in this experiment. The context should matter. Again – we’re not computers who eat potato chips in a vacuum. We’re eating them in a certain environment. And the environment matters. By Gilbert’s reasoning, it shouldn’t matter where we have our dinner – whether in the toilet of a crowded mall or on a beautiful restaurant near the ocean. Food is food after all and our stomachs won’t know the difference. Yeah, maybe so Dan, but you’re not a stomach (hopefully). As humans – we don’t just eat, we experience. Our environment can either improve our ruin our meal. How much would you enjoy your salad in a restaurant if I paid the waiter to place a delicious dessert in the middle of the table and you’re not allowed to touch it?

The talk was interesting and I would recommend it if only because you’d learn more about human nature. But while Dan’s experiments were interesting – I wasn’t a big fan of his reasoning. He was trying to push his hypothesis too far – and wasn’t intellectually honest enough. Sure, human beings aren’t perfectly rational and there are plenty of experiments to prove that. But they’re not always irrational. And when an experiment doesn’t clearly point to a logical error in judgment – it shouldn’t be presented in that light. By doing that – Dan undermines his argument.

Link: 

https://www.ted.com/talks/dan_gilbert_researches_happiness#t-1995785

 

"Silence is the best expression of scorn" - G.B. Shaw

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