Today I read “How We Decide” by Jonah Lehrer. It’s a book that explores how our brains make decisions.
Chapter 3, “Fooled by a Feeling” talks about how we make decisions emotionally and not rationally. Here are some of his points:
– The only people who are immune to making emotional mistakes are neurologically impaired people who can’t feel any emotion at all. In most situations, these people have very damaged decision-making abilities. And yet, because they don’t feel the extra sting of the loss, they are able to avoid the costly emotional errors brought on by loss aversion.
– Loss aversion is one of our the most emotionally impacting bad decisions we make. Because we miscalculate our risks, we keep chasing after the possibility of a big game because we can’t except the prospect of a loss. Our emotions have sabotaged common sense.
-Because humans are wired to dislike potential losses, most people are perfectly content to sacrifice profit for security.
-Everyone who experiences emotion is vulnerable to making negativity bias mistakes. Bad is much stronger than good.