Behavioral Economics: This is why you often make irrational decisions

Let's not kid ourselves: sometimes we make decisions and act pretty … irrational. Behavioral economics wants to answer why this is so.

We know that a healthy vegetable omelette for dinner would do us good, but we still prefer to put a pizza in the oven. We know perfectly well that we will be tired the next morning, but an episode of our favorite series just has to be. We have seen many times that if we put off the work, it doesn't go away, yet we do it again and again.

Nobody wants to deny that humans are intelligent beings. But we all often behave irrationally in everyday life. Whether when shopping, managing our finances or in our lifestyle: we constantly make decisions that are anything but optimal. We should actually be smarter – and mostly even beforehand …

In the science of behavioral economics, researchers try to use psychological approaches to explain why our ratio so often loses out in decision-making processes. They have already identified the following influences, which play a role in this and which often lead us away from the rational path, as important.

7 reasons why you so rarely make the optimal decision

1. Reluctant Affections

Many of our decisions have immediate and long-term consequences, and often both are not good for us. Especially when a feeling of happiness beckons immediately, we tend to put the long-term consequences aside, even though we know them. Deciding on the closest solution in order to check something off as quickly as possible can also be an example of this type of decision-making factor.

2. Overestimation of one's own experience

What behavioral economists call "false heuristics" means the fact that we make generalizations based on our knowledge and experience that are objectively incorrect. Example: Whoever has been cheated on, often mistrusts other people afterwards. It's understandable for all of us, but not necessarily rational.

3. Social norms

Even if we don't want to: we keep looking left and right and comparing ourselves with others. What we perceive in the process affects how we decide for ourselves. For example, it seems to us fundamentally easier to run after someone than to go our own, untrodden path, and when even many people show us a decision, we often no longer question it at all.

4. Mental exhaustion

Towards the evening, most of us have a drastic decline in the ability to make rational decisions. The reason for this is that we are simply tired – from all the decisions we had to make throughout the day, from the many multi-tasking, social conflicts and and and. If we still don't get enough sleep or are generally overwhelmed by our everyday lives, this mental exhaustion can also be felt during the day.

5. Overkill of opportunities

Whether shopping or spending free time, we usually have more options to choose from than we could try or even overlook. This makes us so confused and distracted that in the end we no longer focus on what is really important for the decision: what we actually need, want or what is best for us.

6. Self-deception

When we have made a decision or tend in one direction, we often quickly switch to the mode of convincing ourselves that it was or is correct. Instead of remaining open and thinking soberly, we talk about things nicely, revalue pro-arguments and contra-arguments and thus glorify our (already clouded) view.

7. Congenital "perceptual defects"

Through various experiments and studies we now know that in some situations we are led astray by our own perception or to make irrational decisions. So we "anchor" ourselves z. B. if there are several numbers, always in the first one we see and let it influence us. In other words, if a sign in the supermarket reads "3 for 6 euros", the probability is high that we will buy three, even if we only need one and that alone costs only two euros. Another example of such a perceptual error is that we consider the risk of a loss to be more serious than the chance of a profit. So there are many things that we do not dare to do, even though it would be wise to do so.

Conclusion: not optimal is good enough

Now the knowledge of all these obstacles to an optimal decision can on the one hand help us, of course, to perhaps live a little more sensibly in the future and to make a decision. For example, we could try to recognize immediate rewards as a warning signal, always stick strictly to our shopping list, or postpone any decision after 4 p.m. until tomorrow. But then there are probably still enough factors left (which even behavioral economists don't know about) that make purely rational decision-making impossible – so why should we stress ourselves when we're often too mentally exhausted to be sensible?

Suboptimal decisions and irrational behavior are part of being human for better or worse, sometimes we are just rational, but not sensible. But if that is the price to be empathetic, emotional, creative and capable of learning on the side, we should pay it with pride and gratitude.