Mythbusters Series: People Are Rational


Sorry folks, there’s no such thing as a purely rational or logical individual. I hope it’s no revelation that, in general, people are irrational & largely inconsistent decision makers. Please take the U.S. state lottery system for confirmation. Economists refer to the lottery as a ‘stupidity tax’; proof in point, it generated about $68 billion in ANNUAL revenue in 2013. John Oliver of HBO’s “Last Week Tonight” sums up lottery spending nicely for us: “That’s more than Americans spent last year on movie tickets, music, porn, the NFL, Major League baseball, and video games combined. Which basically means that Americans spent more on the lottery than they spent on America.”

Everyone believes they can beat the odds. They believe if they decide to play, the chances will be in their favor simply for taking part in the game. Actually, studies show each of us believe we are above average at nearly everything life has to offer (not just guessing lottery numbers). This includes intelligence, driving skills, and sexual prowess to name a few. This well-studied bias is called illusory superiority, or the above-average effect, and it doesn’t take an I/O psychologist to know that not everyone can be at the right tail of a normal distribution.

Take, as another example, the pervasive texting while driving epidemic that is currently plaguing our roadways. A well-publicized study by University of Utah psychologists shows that only about 2.5% of the population, dubbed ‘supertaskers’, can multitask well enough to safely talk on the phone and drive, let alone text and drive. So why can’t otherwise intelligent people stop staring at their smartphone at the most inappropriate time in the day?

Along with our natural biases, evolution is hard at work against rational decision-making. When a person hears the endorphin-producing ‘ding-ding’ of a text message or email, a hard-wired, biological switch is activated. Early in human history, this switch served the purpose of quickly identifying whether or not someone tapping you on the shoulder from behind (a primeval text) was friend or foe. The person’s attentiveness to the encounter could result in a greeting or a beheading. The text message is this same trigger that your brain must attend to in order to determine the intention, even if it means running your car off the road.

When it comes to taking risks, with our finances or our safety, human beings are terrible at seeing the big picture. Early humans only had to make very short-term decisions aimed at maximizing their immediate survival needs (basically food & sex) because the lifespan was only a few decades long, if you were lucky. So in this era, risk-taking was calculated based on the likelihood you could avoid detrimental outcomes like starvation or predation. Today, we don’t have as many immediate consequences to our actions, but the sum of our short-term decisions does determine our long-term success.

Hopefully you are now more aware of the fallacy of logical decision-making. But if this doesn’t resonate with you, perhaps you tend to agree with the roughly 21% of American adults who responded true to the statement: “Winning the lottery represents the most practical way [for me] to accumulate several hundred thousand dollars.”

For more busted myths, check out Right Brained vs. Left Brained and stay tuned for the next post in our mythbusters series.