This is a fascinating topic that my good friend Brian Kasal from FourStar posted on The Leadership Matrix. Read how research developed by University of Chicago Professor Richard Thaler, the 2017 recipient of the Nobel Prize in Economic Sciences, explains how people may not always make the most rational decisions. Some might even make decisions that aren’t in their best interest, like filling up on bread before a meal… or, in this case it’s cashews served before a dinner party.
While the story highlights the apparent inability to resist eating cashews despite the potential of spoiling a dinner appetite, irrational decision-making effects real-life decisions with long term implications. Let’s look at workers putting money into retirement plans. Many Americans don’t save enough for retirement, and many save nothing at all. It has been found that a greater percentage of workers put money away towards retirement in opt-out plans, where employees are automatically enrolled, compared to those who must opt-in to participate in the plan. Same workers, same needs, different choices.
Irrational decisions come out of the corporate world too. Anyone remember New Coke? Well, the change was almost universally considered a flop- on the day it was introduced, Pepsi even gave their employees the day off- and the original formula was reintroduced as Coke Classic less than three months later. Enjoy the post below!
Click here- The Leadership Matrix- Are We All Making Rational Decisions?
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