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The psychology behind irrational decisions - Sara Garofalo


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Often people make decisions that are not “rational” from a purely economical point of view — meaning that they don’t necessarily lead to the best result. Why is that? Are we just bad at dealing with numbers and odds? Or is there a psychological mechanism behind it? Sara Garofalo explains heuristics, problem-solving approaches based on previous experience and intuition rather than analysis.

Additional Resources for you to Explore

The Prospect Theory first introduced the concept of heuristics by describing how people make choices in uncertain and risky situation, as opposed to the standard economic model’s idea of human decision-making.

This theory was developed by Amos Tversky and Daniel Kahneman and first appeared in 1979 with a paper that laid the foundation of the field of behavioral economics.

Here’s an interesting paper from Harvard Magazine which explains the basic idea behind Behavioral Economics. Take a look at it and see what else you can find out about this topic!

In 2002 Kahnerman was awarded the Nobel Prize in Economic Sciences for his discoveries on the psychology of judgment and decision-making. In 2011 he published the book “Thinking, Fast and Slow”, in which decades of research and insights on heuristics and cognitive biases are summarized.

Interested in listening to the above author talk about his research? Here you can find an interview with Daniel Kahneman about his book and an independent quick video-review of the Thinking, Fast and Slow. And here is a link to his TED Talk: The riddle of experience vs. memory.

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Meet The Creators

  • Educator Sara Garofalo
  • Script Editor Alex Gendler
  • Director Hector Herrera
  • Producer Pazit Cahlon
  • Sound Designer Adam Harendorf
  • Narrator Pen-Pen Chen

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