Humans often make bad decisions. If you like Snickers more than Milky Way, it seems obvious which candy bar you’d pick, given a choice of the two. Traditional economic models follow this logical intuition, suggesting that people assign a value to each choice—say, Snickers: 10, Milky Way: 5—and select the top scorer. But our decision-making system is subject to glitches.
In one recent experiment, Paul Glimcher, a neuroscientist at New York University, and collaborators asked people to choose among a variety of candy bars, including their favorite—say, a Snickers. If offered a Snickers, a Milky Way and an Almond Joy, participants would always choose the Snickers. But if they were offered 20 candy bars, including a Snickers, the choice became less clear. They would sometimes pick something other than the Snickers, even though it was still their favorite. When Glimcher would remove all the choices except the Snickers and the selected candy, participants would wonder why they hadn’t chosen their favorite.
Economists have spent more than 50 years cataloging irrational choices like these. Nobel Prizes have been earned; millions of copies of Freakonomics have been sold. But economists still aren’t sure why they happen. “There had been a real cottage industry in how to explain them and lots of attempts to make them go away,” said Eric Johnson, a psychologist and co-director of the Center for Decision Sciences at Columbia University. But none of the half-dozen or so explanations are clear winners, he said.
[For more of this story, written by Emily Singer, go to http://www.theatlantic.com/sci...in-the-brain/497402/]
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