People often have a weakness for the immediate gratification of a pleasant experience, even if it makes for a very poor decision.
DG: Yes. So inthis fellow, George Bush, for those of us who were kind of on the liberal side of the political spectrum, didn't seem like such a great guy. The expected value of this lottery is two dollars; this is a lottery in which you should invest your money.
West Point assistant professor of leadership and psychology, Mike Erwin, recently shared in Harvard Business Review his research findings on the mindset traps we can get caught in when making decisions.
I want to talk now about errors in value.
And if it looks like Greek to you, it's because, well, it's Greek. We have the tendency for people to go for 50 dollars now over waiting a month, but not if that decision is far in the future.
This typifies a lot of situations in life in which you will gain by waiting, but you have to be patient. Because it used to costand there's no way I'm paying 1, for something that was last week.
They don't come quickly to mind, and as a result, we vastly underestimate them. And many of the things we've heard about from our speakers today — how many people do you know got up and said, Poverty! Surely that causes people to overestimate the likelihood that they'll be hurt in these various ways, and gives power to the very people who want to frighten us.
DG: Yes, of course.