Talking Point and Summary: Week 2

It always seems amazing to me just how bad we are at judging absolute magnitudes. You might think our lives would depend on it, but it seems that they do not! Our brains have evolved to make comparisons; in particular, to compare things that are very nearby and/or very similar.

In this video I talk with Jess about the common themes of the second week. Jess has also summarised the week’s themes here.

Next time, we will see how the fact that we can only compare and do not really know the absolute value of any quantity (size, money, risk, pain) can help explain some of the puzzling, and apparently irrational, peculiarities of human decision making.

Week 2 Experiment

Now, for this week only, I have two things for you to try.

First, you can take the experiment for Week 2.

Week 2 experiment

Second, you can explore for yourselves how good we are at comparative judgements and how bad we are at absolute judgements. This is a kind of ‘interactive demo’, which you are invited to explore.

Week 2 demo

Please note that these experiments ran in 2013 and, now that the results have been processed, the website is no longer maintained, so may not be fully accessible or current and technical support is not available. Participants are encouraged to try the experiments in order to test this week’s theories in practice and see how their results compare with the overall findings. However, participation in the experiments is not essential to the learning outcomes of the course.

Talking Point

Before we move to Week 3 we’d be really interested to know how you’re finding the course this week, so please leave a comment or share some part of your experience so far in the discussion below:

• Can you see examples in the news or popular literature of the Easterlin Paradox in action?
• Is a ‘flat’ mind essential to be successful in an environment of trading risk and return?
• In light of the unstable and imperative nature of the human mind, as I discuss with Rory Sutherland, what does this mean for how we make decisions?

On a scale of 1 to 10 (where 10 is a ‘believer’ and 1 is not) how much do you now subscribe to the idea of a ‘flat’ mind? It’ll be interesting to compare your answer here to last week’s and see if anything has changed in either your understanding or appreciation of the idea or concept of a flat mind.

Don’t forget to contribute to the discussion by reviewing comments made by other learners, making sure you provide constructive feedback and commentary. You can also ‘like’ comments or follow other learners throughout the course.

Next Week

Next week we will see how the fact that we can only compare and do not really know the absolute value of any quantity (size, money, risk, pain) can help explain some of the puzzling, and apparently irrational, peculiarities of human decision making.

Nick