Why we make bad decisions | Dan Gilbert

www.ted.com Dan Gilbert presents research and data from his exploration of happiness -- sharing some surprising tests and experiments that you can also try on yourself. Watch through to the end for a sparkling Q&A with some familiar TED faces.
TEDTalks is a daily video podcast of the best talks and performances from the TED Conference, where the world's leading thinkers and doers give the talk of their lives in 18 minutes. TED stands for Technology, Entertainment, Design, and TEDTalks cover these topics as well as science, business, development and the arts. Watch the Top 10 TEDTalks on TED.com, at www.ted.com/index.php/talks/top10

[Mathijs Tieken]

I wish more TED talk videos would include a discussion at the end, because that's where the proposed ideas are tested, scrutinised, and criticised by other great minds. It helps you put things in perspective. Often, stories sound too good to be true, and appear to have perfect logic, simply because you are not questioning them as you listen. Having an audience full of TED attendees do that for you and hearing what they have to say really adds to the experience.

[Savio Dias]

Mathijs Tieken, that would be absolutely fantastic. To have after each red talk a real life discussion where people ask questions, advice, more depth, come with real life cases and experiences!!

[Flappy]

i love that idea this would be the better decision for all media/mediums of discussion buuuuuuuuuuuuuuut.. people....

[unenglishable]

30:04 was a great example

[MrManiac3]

Agreed. It's too bad that many don't, but it's a good thing that they are all open to comment on KZbin... even though KZbin commenters aren't "great minds".

[津山哲郎]

Mathijs g. G g Tieken

[Wilson Semilio]

That was a great talk! I truly love TED for publishing these.

[Hardik Upadhyay]

Great topic and nice relevant examples... There is a rational thinking in humans but most of the times we tend to ignore and move ahead.

[BodaciousBurnley]

The Q & A session is more powerful than the actual talk! "If you had to solve one of these problem Chris which would you solve, terrorism or poverty?" Both are wonderfully convincing. I was told last year to buy "Stumbling on Happiness". After reviewing this talk, I don't have much of a choice do I?

[samfortunato]

personally, i'd go as far as to say that this might be one of the more important TED talks released, & should have more views. dan's explanations on bad decision making IMO is just so incredibly fundamental to how all humans on this earth behave & respond, and understanding these behaviors could def. lead us to a more peaceful world.. his words during the talk at the video's end about "terrorism" i think are ENOURMOUSLY important insights for people today in actually dealing w/ matters like this

[TheGildedStar]

Great talk! I was entertained the entire time and I feel a wee bit more confident in my ability to make more logical decisions, even though most of this information will evaporate from my mind by morning. Regardless, it was a great listen. Thanks Dan!

[Alis]

I hope you still remeber the important points of this talk! :D

[Beldon Huang]

The same as his other talks, Dan Gilbert never fails to surprise me with his exceedingly astonishing facts, while showing us the undeniably funny and foolish aspects of some of our behaviours.

[Andy Elliott]

I used to think i was indecisive, but now i'm not so sure.

[elsa lstri]

@MaeMae II ooopooooooopooooooooopo

[Rachel pickens]

Ha 😀

[Andy Elliott]

@Sharon Chevalier Here I am now 6 years after my original comment and now I am actually REALLY decisive,I'm a different person. Well, when I say really decisive what I mean, more or less is that I'm not quite as indecisive as I was, although come to think about it maybe I am, it's hard to be certain but overall I'm possibly.............

[Staying with It]

What makes a man turn neutral? Lust for gold? Power? Or were you just born with a heart full of neutrality?

[Your fellow human being]

So how are you now

[Kelly Berry]

Awesome lecture. One of the best I've found. Thank you. We needed that.

[VItIs]

I cannot like this enough! Helps me immensely with one of my biggest problems - decision making

[John]

This talk is very inspiring, I don't know why this get so much less views compared to other Ted talks

[Francesco Spadolini]

Brilliant and eye-opening speech. It's incredible that we have all these bias. We should study more our bias and "how we work" in order to improve how we make decisions and our impact in the society.

[deepinthewoods]

Excellent talk, and it rings true. Another area in which we've not evolved as fast as the environment we've created.

[Daniel Montealegre]

This man is so capable of opening people’s eyes

[Debbie Willey]

Once again, fabulous speaker, fascinating subject! On the lottery ticket purchase, I figure the fantasy of winning is worth $1 in itself. Also, at that point, my odds of winning are basically the same as the person's who will eventually win. But because I know the odds of winning are astronomical, it's the reason I will only purchase 1 ticket; you have to play to win. (It works for me!)

[Grzegorz Sz]

Wow! Jaw-Dropping Lecture! :) I wish all lectures on every university were so interesting and well performed as this one.

[Fix The PIX]

True

[John G.]

This was so very interesting. So many things to think about on a personal and professional level as a result of watching this.

[SuzieQ Wonder]

This man is a gifted presentator ~ love his ‘real’ attitude!

[Ashitaka L]

it's a fantastic speaking, very informative man! TBO, I'm not a person easily moved by others, but man, you really provide some fun ideas to me and thank you with all my heart

[TheFireflyGrave]

I wonder if part of the reason why people choose the $50 now vs. the $60 in a month is less about impatience and more about certainty. What if the subject forgets to pick up the $60 or the source of the money skips down or goes bankrupt? This factor may not enter into the parameters of the thought experiment but it could subconsciously influence the subjects decision. 'A bird in the hand is worth two in the bush' if you will.

[Ting Lee Hoong]

@Darets You're right in this sense, but he's not wrong either. You calculated for real world variables; he needed to control his experiment with just one manipulated and one responsive variable: the details (time and value) of the amount received, and the willingness of people to choose it. He couldn't demonstrate the trustworthiness of this relationship if there were other factors like: the gain is insignificant, waiting changes your financial situation etc so I think he made assumptions to control their effect, like he assumed the money was not crucial but it was significant (10$ does little in investments but is big enough for you to feel the loss). If he included the time-sensitivity for late fees as you have said, then the solution becomes pure math: either gain 50 and pay x, or gain 60 and pay x+30 where your net gain becomes 50-x or 60-30-x = 30-x and I'm sure there's only one optimal solution. And in this case, both waiting time and amount gained are optimal if you take 50$, it doesn't demonstrate that the willingness of people to have something immediately could suppress our desire to gain more In conclusion, you accounted for more variables, but his experiment is carefully designed and sufficient to prove his point.

[Ting Lee Hoong]

​@John Hewett Yeah if i lost the ticket I'd really feel like: fxxk that; but if i lost the money, then I'd be like: do I need this 20$? If no, I'll go to the theatre. Apparently the analogy works for me And for the first point, both the uncertainty and my impatience played a role: the uncertainty is logical, but was playing a game before this: I needed to wait to unlock new characters that could be used in the event, and I waited to open loot chests for them; and some time after I unlocked the bare minimum of characters i needed (wasn't very sure I memorised all the stats and opponent positions correct) and then seeing I could wait for a 2hr 40min loot chest and (a little) possibility of getting a new and better card that would ensure victory, I just thought: "I'm bored right now, and i don't gaf about the best strategy, I'm pretty sure I'll win and screw the game if i don't", and I immediately played the event......

[John Hewett]

There's some great points made in this post and replies. The presenter of the talk also makes some great points of course, but our choices aren't necessarily quite as stupid as made out, because of things like uncertainty - just because someone says they'll give you 20% more if you wait a month doesn't mean they wont change their mind or go bust, or forget. You then may have to keep it in mind and chase them up in a month's time, and if you have lots of such deals to keep track of this kind of stress can all add up. 12 months versus 13 months is different - if you're going to have to wait as long as 12 months, the extra month or even a few more, doesn't make a lot of difference. Also psychological effects are real - if you feel that you've had to buy a theatre ticket twice some people would find that pretty depressing, and one of the main reasons for going in the first place is only to feel better/for leisure reasons anyway rather than being for something that you actually need. I would still buy the ticket anyway - better to spend $40 on the theatre than $20 on nothing!

[Robotman]

This reminds me of something Neil Degrasse Tyson said (I think on the Joe Rogan podcast). Something along the lines of: There's a percentage of Americans who believe that the Earth is not a sphere. But what if those who said it is not a sphere actually meant that the Earth is spher*ical* - because it is; it's not a perfect sphere.

[Andrew J]

It doesn't really matter the reason. If the decision to wait a month were rational, then it wouldn't matter if that month were now or in a year from now. If the certainty of getting the money a month earlier is worth the cost, then it's worth that cost regardless of whether that month is now or later.

[PedanticNo1]

This is a brilliant lecture! Nothing more needs to be said, haha.

[Alex Wells]

This is the kind of TED talk that you learn a lot from, but you need to watch over and over to make it stick.

[Vlad Patryshev]

This is amazing. Teaches to behave on stock market, way better than all those stupid books and tutorials and courses.

[Cinnamen Coco123]

the advice in the end was really inspiring

[DigitalAssassin]

Superb, wonderful talk. One of the best speakers I've heard, and he has something interesting & useful to talk about no less!

[SciMag]

surprisingly interesting and very very informative. the man's got it!

[más]

30:00 The guy makes a good point. The so-called 'rush' of playing a game is often better than actually winning it. Though the win would something like double that same rush

[DLC ENERGY]

Oh what a rush! I guessed the first 2 numbers again on one of my 100 tickets!! What are the odds of that!? lol Gambling is a waste of money. The "rush" is worthless. You can play a video game with fake money if you're not concerned about actually winning. They wouldn't pay if there was no prize for winning.

[Thomas B]

Partial reinforcement

[K M]

That dude probably owns shares in the lottery lmao

[B5429671 XJ]

Which is a perfect example of "ignorance is bliss." If the people actually realized how insanely stupid it is to play because you won't win, they wouldn't get nearly as big of a rush.

[Tim Gleason]

Tamas Egyed I thought what the rush guy said was a lot more interesting and insightful than anything dan Gilbert said actually

[black star]

Great talk. Felt that whatever he said is true

[shirish kirtiwar]

I don't know why so many people have disliked this video. This I think one of the most outstanding Ted Talk among others.

[Tim Gleason]

shirish kirtiwar it’s too basic of a concept, and really long winded for a simple message

[Helius Infinitus]

That second to last "question" was brutal and is so true.

[James Brady]

Love the finish, well done: "The only things that can destroy us are own decisions... if we are not here in 10000 years, its going to be because we could not take advantage of the gift given to us by a young Dutch fellow, in 1738 .. because we underestimated the odds of our future pains and overestimated the value of our present pleasures"

[James Brady]

@PresidentOfficiel Daniel Bernoulli

[PresidentOfficiel]

Who is the young Dutch fellow?

[ExponentialAardvark]

Probably one of the best TED talks I've seen in a while. Bravo!

[JRockTheIII]

My mind gets blown every time I watch one of these. This one in particular blew me away...perspective concentrated. Thanks to this channel for exposing those of us who question objectively, to objective viewpoints that we must confront.

[Samantha Smith]

I had to sit up and listening to Dan Gilbert's Bernoulli's obsession. He literally shredded marketers' strategies by a simple psychological and behavioral perspective! However, the big question tonight is: Are we that far in that we can barely see his point?

[Nicholas Youmans]

it's about happiness because he's talking about, in a sense, the fabled equation for happiness. from what I understand, that's what behavioral economists study... how humans invest time, money, energy in search of happiness... what drives them to do so... and what we can do to manipulate that knowledge to our advantage. great talk.

[hunter Maxwell]

This is one of the best ted talks of all time. The value is here the odds of gain are more than the height of Mount Everest

[Alexa S.]

I like it ! I already knew that I was making silly compairaisons to things that shouldn't be compared but couldn't help myself at the moment... Anyway I do things because I need to dream... I'm not sure that I want to get anything special or valuable or cheap. I just wanna do some stuffs that would allow me to believe that I'm more free than what I think... Even if it's totally untrue. Contempt is what we buy, more than products. P.S : Dan, why do you hate us ? xD A french citizen

[Jonathan de Ruiter]

lol. I'm sure he spent plenty of time on his speech, and there are plenty of really good examples and points. I just think this example highlights a serious flaw in certain ways of thinking about economics. It was fun talking with you, I definitely agree with your points about the power of marketing and sales -- it is a powerful tool, especially against those who don't understand it.

[elmtree33]

Brilliant lecture! Thank you.

[Vitor Pinto]

Amazing research work on us behaviour. Great speach and presentation

[Derek Rogers#1]

Learned a lot from this mans speeches and book. Thank you

[just10 tyson]

This is still more relevant than any other Ted talk

[098anne]

Love the talk. It really doesn't help that there are far more entities that WANT the masses kept stupid.

[Thomas J. Ciaccio]

Dan is a pleasure to listen to and intelligent.

[Abhimanyu]

This is the best thing I've ever watched. Thank you. I'm blessed.

[De Jure Claims]

Dan Gilbert just shot to a high position on my list of respected dudes.

[Liz Gichora]

Enjoyed the session, thank you!

[TimesNuRoman]

a great speaker, a great talk.

[Tania Gaitán]

Jay Walker is so damn right, we got to the moon because we didn't listen to the economists! LOVED his intervention!

[Oz El]

one of the best of ted. good guest and smart audience...

[BoredErica]

Excellent. I thought I knew a bit on this topic but the speaker helped me think of things in a different and interesting way.

[weesh]

Excellent. I saw this a year ago and thought I understood it, but this was a great reminder.

[Nefuros]

People also pay for a particular experience, feeling, or a reputation with certain products and situations which is a largely neglected factor in the examples. A stimulating thought experiment brought up by this video nonetheless.

[Robert Horne]

Another great video by AN ECONOMIST. Good stuff...

[Boom]

The QA part at the end ROCKS! it starts at 24:00.

[GameAlot1231]

Great talk! Really facinating topic that makes you think :)

[onyxOmega]

It's still a good example. His point is that the thing you're more able to recall is the thing you'll predict as more likely to happen. For the vast majority of people, it's easier to recall words based on the first letter. Even though your first thought was different from most people's, you confirmed the theory that your prediction of probability correlates with how quickly the idea comes to mind.

[robertmaxwell797]

The answer to the 1st question optimizes my thoughts, excellent speaker

[Hart Heiden]

What an incredible speaker. Aside from the obvious, a thank you very much sir!

[Cathy Sander]

I agree. Its not the quantity, but the quality of life, that matter. It would be bad if we were dying and realising we could have done more, or regretted it.

[Samantha Smith]

Listening to Dan Gilbert, I now realize why he is still one of the 500 million richest businessmen in the Forbes World. He is intelligent and it takes such a mindset to get to understand his philosophical perspectives. Nice watch! I would like to present his argument to like-minded people. Feel free to interact!

[makrofocus]

Great guest, great audience!

[FreethinkingSecularist]

Dan gave me a gift...His book Stumbling on Happiness! I loved it.

[Mindset Olympics]

I definitely prefer being a long term thinker and beginning with the end in mind

[Neceros]

He got me almost every time!

[TheHouseOffice]

Gosh this guy stimulates my brain like nothing else wow.

[Andrew W]

Burnouli. The man who invented the laws that allowed flight. I love that guy.

[Sashazur]

Those kinds of laws aren’t invented - they’re part of nature already, but it takes a very smart person to see them and describe them.

[ChariotRider]

great stuff! I want to attend TED Palm Springs, hope it'll provide great content like this!

[xxNikkeh]

Took a while to comprehend but when he began using realistic examples, wow.

[Sharon Chevalier]

Mike Simmons & xxNikkeh I am about to watch and listen again. I will be more focused this time and take notes!

[Mike Simmons]

Did you stick to being “woke”? I even asked out loud, “ depends how hungry I am” for the $25 burger lol. Stick with it, much to learn.

[x4everkill3rx]

This is why i love TED Talks

[Robotman]

It feels like this entire TED talk was a warning of what social media and the Internet would do: Provide mankind with constant sources of instant gratification; completely available anytime and anywhere.

[n0tfr0mth1sw0rld]

sooo good! so true and actually by the same point really sad!!

[Charles Hu]

its an interesting proposition, to cancel out money and i think your point raises two questions which i think we might consider. firstly, should we continue to do something even though we have grown tired and have come to hate it? that to me seems very counter intuitive to free will secondly, if we completely remove money from all systems, what would trade of items be based on? could that possibly be a new form of currency that emerges in such a situation?

[Anne Atambo]

Watching in 2021 and thinking about the covid pandemic when he speaks at minute 25:00 about a plague. Profound clip!

[Antti Jaakola]

Once a long time ago, lost a ticket to a play where there was in a role Sir Lawrence Olivier himself. Bought another one. I certainly have to say I made the right decision to pay the price twice.

[latestranger]

This is hilarious - In the question about the Rs (Are there more English words that have R as the first or third letter?), I immediately thought "herd" and assumed there were more with the third letter. And then, I immediately assumed I was wrong. Hehe.

[test123ok]

one of the best TED talks!

[Jason LeBlanc]

This guy is such a great speaker!..i wish i could do that...

[Paulginz]

WOW, Someone who shares my point of view of the world! I couldn't have explained rational utilitarianism and how far we are from it better myself.

[Wittha dave]

Good and bad are subjective, and each individual has his/her own definition of what good or bad is, I think.

[Robert Lavelle]

I for one don't believe in good or bad but wholesome and unwholesome actions resulting in the like Karma

[Mark Steed]

The audience member makes a good point about the "feel-good"', "hope" factor of playing the lottery... However it also makes a lot of sense to risk losing a minuscule amount of money for the possibility of gaining an enormous sum of money. People who buy shares do that every day and we don't say they are stupid. Its only stupid when you risk more money than you can afford to lose.

[Andrew Noshy]

Error in value: "A good deal that used to be a great deal is not nearly as good as an awful deal that was once a horrible deal"

[Sumit Fuley]

Gilbert says "Master's of our own fate; underestimated the odds of future pains and overestimated the values of present pleasures"

[Lion’s Share]

Great talk and Q&A! Just a little thing: Bernoulli was Swiss, not Dutch.

[Paomnnehal]

Awesome video, in my favorites and five stars

[Kimalee Borgert]

Haiing lived with an alcoholic and compulsive gambler for 8 years, and having been a compusive gambler myself, plus knowing a lot more alcoholics, I consider myself an expert in people who make poor decisions and have emotional problems. However, noone has given me a graduate degree in this, but still being a bit of a gambler, I'll wait a few more years before given up the idea that I'll be given the degree.

[Tony McModeNut]

Excellent talk.

[El Astuto Indocumentado]

"our brains were evolved for a very different world than the one in which we are living. they were evolved for a world in which people lived in very small groups, rarely met anybody who was terribly different from themselves, had rather short lives in which they had few choices and the highest priority was to eat and mate today." That explains the current society of pleasure and that's the half of what a human is. When a human explore it's needs to create and improve, the other half comes in.

[Sascha M Rose]

18:30 it all depends on the needs in your life, if i dont really need $50 to survive for the month then i will wait for the $60 but if im in dire need of money for this month for instance to pay a bill and to avoid late fees then i will take the $50 dollars now and not wait a month for the $60

[MaeMae II]

You have more chance of dying on your way to the lottery than actually winning it.

[Stanley Sharkey]

>responds with a super lengthy comment to say nothing and uses the "word" irregardless. Bruh, just stop.

[Troy Odynski]

Oddly enough that was another flawed example of his the suggestion a pool is more dangerous to you. By his own words he failed to discuss the all important context. So you need to further expand who drowns in pools, the vast majority are not healthy capable responsible swimmers. Meaning if you are one of those people your chance of drowning in a pool is actually ~zero. To suggest you should fear a pool most is patently inaccurate, but for work you fly in a plane 3 times a week you are more likely to die in a plane that someone who never flies in a plane, who can't swim but often gets drunk at night and acts out alone in the backyard next to their pool who btw is the person who should fear a pool most...Really basic faulty logic because it turns out in order to be killed by a shark it requires you interact with the ocean so if i never goto the ocean by chance are zero to die to a shark irregardless of what the EV is per capita. He does this over and over and over to create these illusions of breaking "common sense".

[Rob Fowler]

You just saved me 2 dollars AND MY LIFE!!!!!! LOL.

[isabelle ilpide]

And then you've still got to get back home.

[Rusty K]

@Anthony Gerardi you didn't 'beat the odds'- MaeMaeII said that the unlikely random occurrence of your death was a little MORE likely than winning the lottery. Therefore your point makes no sense.

[Interior Dasein]

Best Ted talk in a while.

[Brian Mack]

I've seen another vid with this guy. Makes interesting points.

[napalmhardcore]

Regarding the lottery. The payout is so huge compared to the price of entry that it makes the odds of winning irrelevant because no matter how small a chance you have of winning, you do have a chance and your ticket is just as likely to win as anyone else's. I've heard people say of something that could probabilistically happen at any given time "We won't see this in our lifetime or for millions/billions/trillions of years because the odds against it are astronomical". They overlook that it is just as likely to happen now as it is to happen at any arbitrary point in the future.

[Primo Stracciatella]

Right. Winning the jackpot is as likely the first time you play as it is after playing for 30 years.

[glaukus666]

Truly great.

[P. B Amygdala]

However, on the $50 vs $60 question... you didn’t mention the factor of control. If you offered me money now or money later, I would take the money now and run. The $10 sacrifice, even accounting for interest, is insignificant to me because a lot can happen in a month, and you might not actually pay up. So the choice of payment now ensures that I actually get something. Something to think about. Thanks!

[Mike Lee]

Your final point "ensures that I actually get something" was my reason for choosing to go to the play after losing the ticket. If I already spent $20 on the play then I'm gonna see the play even if it's gonna cost me $40 I want to get something for the money I've already spent. If I lost one of 2 $20s then I might see the play or I might not. I haven't spent any money on it so then I've got to decide if it's worth my last $20.

[Mr.Sceptic]

Well, in that case people should choose to get $50 in 12 months instead of $60 in 13 months because everything you said still holds true here as well.

[Andrew J]

It doesn't really matter the reason. If the decision to wait a month were rational, then it wouldn't matter if that month were now or in a year from now. If the certainty of getting the money a month earlier is worth the cost, then it's worth that cost regardless of whether that month is now or later.

[Truman Phan]

P. B Amygdala it’s a controlled question. If you throw other factors in there, then obviously it will skew

[Gina Slattery]

I'd be interested to hear how optimism bias factors in to all of it.

[Nattalie Johnson]

When he asked "words" I thought of words with "r" in the third place. I know most mortality rate so I have an idea of who are more likely to die from a particular cause. I don't play the lottery or do any form of gambling because chance is not what appeals to me. Love this video though...

[Jason Theobald]

Quite revealing. Thank you!

[Krishan Borwal]

Brilliant presentation.

[PictureYourDivorce]

Thank you, Professor Dan Gilbert for showing how even people who aren't distressed choose poorly. Most people miscalculate gain and pain. It's no wonder distressed divorcing people make bad decisions.

[Samantha Smith]

On a relationship level, it works magic. I once asked myself, why I have only three exes and already tired. The reason is: decision making. I underestimated the odds of my past by overestimating the value of my present pleasures.

[Wantthosedaysback]

THis is a great talk because they Tedtalk left in the audience questions . There are always some great minds in the seats that can really hash out the pros and cons of an idea. Tedtalks should consider leaving in more audience questions.

[Hi There]

This subjective value is only true if you need it *right now.*