Dan Ariely
Dan Ariely
Dan Arielyis the James B. Duke Professor of Psychology and Behavioral Economics. He teaches at Duke University and is the founder of The Center for Advanced Hindsight and also the co-founder of BEworks. Ariely's talks on TED have been watched over 7.8 million times. He is the author of Predictably Irrational and The Upside of Irrationality, both of which became New York Times best sellers, as well as The Honest Truth about Dishonesty...
NationalityIsraeli
ProfessionEconomist
Date of Birth29 April 1967
CountryIsrael
None of us always make the best financial decisions.
It is very difficult to make really big, important, life-changing decisions because we are all susceptible to a formidable array of decision biases. There are more of them than we realize, and they come to visit us more often than we like to admit.
A very simple bad decision is to get into debt. And that is very expensive.
Linking financial element to energy consumption I think has a huge role if you think about a display instrument that could teach us about what we are using, how much it costs us, how much it is saving, and therefore change our decisions.
I don't want to say that the poor are inherently cognitively diminished, but at the end of the day of making difficult, tough decisions, it's very hard to have the energy to think about things with the right mindset.
We should teach the students, as well as executives, how to conduct experiments, how to examine data, and how to use these tools to make better decisions.
The idea that you will make the right decision every time is very unlikely.
We are all far less rational in our decision-making than standard economic theory assumes. Our irrational behaviors are neither random nor senseless: they are systematic and predictable. We all make the same types of mistakes over and over, because of the basic wiring of our brains.
One of the big lessons from behavioral economics is that we make decisions as a function of the environment that we're in.
Believing you are a bad person leads to a slippery slope.
When we save, everybody in the household is just suffering. By having the coin in a visible way, when you scratch, you can say the person that is in charge of the making money for the family is doing the right thing.
What reminds you in your environment about saving? Nothing.
Rainy day savings are incredibly important, because from time to time, bad things happen. And if you're not prepared for that, it's going to be really terrible.
The people that lend you money basically give you an answer based on the risk that they are willing to take. But just because a bank is willing to take a particular risk doesn't mean that that is the right amount for me to spend.