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Dan Gilbert: Why We Make Bad Decisions
Stefan Johnsonon 12 February 2013
Transcript of Dan Gilbert: Why We Make Bad Decisions
Rhetorical Analysis The subject of this lecture is very pertinent to the audience and the general public of the world. It relates to the decisions we make daily and gives us guidance about the difference between well-calculated and mediocre rationale. Why do people make bad decisions? People are looking for something to tell us how to do the right thing at all times.
We hold our own fate in our hands with the decisions we make daily. Claim Reason 1 Reason 2 Elaboration of Reason Example Elaboration of Reason Example Example Elaboration of
Reason Example Elaboration of Reason Example Elaboration of Claim Objections Bernoulli’s Equation -- that Gilbert roughly translated in to saying “Expected Value = (Odds of Gain) * (Values of Gain)” -- supposedly gave us the gift to always do the right thing. Unfortunately, it hasn’t made any difference. This is because people in today’s society are horrible at estimating the two components of this equation, leading them to make bad decisions. Gilbert’s main claim is that people make bad decisions by not carefully estimating this equation. People make bad decisions due to errors in estimating the odds they are going to succeed. People make bad decisions due to errors in estimating the values of their own success. We overestimate things that we see more often and get more daily coverage in society. Gilbert introduces another example involving four-letter English words with the letter R. Many more people would say there are more words with R in the first place than in the third due to our nature of recalling words by their first letter. However, this is not true. This also relates to the first reason that we underestimate things that do not come quickly to mind. In this case, words with R as the third letter are hard to think of. Things that come more quickly to mind seem more probable for us. This also relates to the last elaborated reason. We always see the lottery winners but never the vast amount of losers. This makes us think it is more probable than it actually is to win and causes us to overestimate the chances we have of winning. This also ties back to the central reason of showing how we inaccurately estimate odds. Call to Action [directly related to elaboration of claim] Gilbert states at the end of his lecture that humankind holds our own fate in our hands. We must take advantage of the gift that Bernoulli gave us. Instead of underestimating the odds of our future pains and overestimating the value of our present pleasures, we must be aware of the context of all our choices, whether it relates to the past, present, or possible. We must look more in depth to the probability of what our future pains can bring, as well as be more rational with determining the value of our present pleasures. Use of Ethos, Logos, and Pathos We tend to compare prices and things to what we know from the past, causing us to frequently pass up the better deal. This causes problems with attempting to determine value [relates back to reason]. $25 Big Mac: many people would not accept this because they compare it to what they have paid for a Big Mac in the past. People do not think about the context in which they are in, such as on a plane with no other food, or in an undeveloped country where $25 can buy a feast. Comparing and relating with other possible options can also cause problems. Comparisons change the value of things. Shifting comparisons lead to a change in context, ultimately resulting in an irrational decision being made. Gilbert uses the example of seeing a family back home in the states after meeting them in France. When in France, they seemed much more nice and friendly compared to the hostile French. But back home, they seemed dull and not as interesting. [This relates to the first elaborated reason because both deal with making decisions based on context]. Extrinsic Ethos: Gilbert has done several TedTalks, has wrote a book on the same material as the lecture topic, was a New York Times Best Seller, and gives the lecture at Oxford (a reputably scholarly place).
Intrinsic Ethos: Through many, many example (and even when he finishes, he says he could go on for another 2 hours), Gilbert shows he is well versed on the subject and can persuade the audience that what he is saying is relevant and applicable.
Logos: Gilbert utilizes a plethora of examples and research that have been done. This warrants his claim and proves the point of what he is trying to persuade.
Pathos: Gilbert is engaging, makes pop-culture references, makes fun of human behavior, makes the audience laugh, directs questions at his audience to get them involved, and allows the audience to picture the point he is trying to layout. Objections: Although Bernoulli gave us this equation to supposedly figure out the expected value of anything and make good decisions, Gilbert rebuts we are not capable of utilizing this to the best possible way. We are unable to successfully determine the odds and values of gain. Gilbert rebuts that Bernoulli’s equation is capable of this and uses this objection to base his claim [ties back to claim]. Today’s society has an inability to estimate odds and values. We tend to underestimate the odds of our future pains, while overestimating the value of our present pleasures. Elaboration of
Reason Example Example We tend to underestimate things that don’t come quickly to mind. ` Gilbert introduces an example by asking his audience whether they see more dogs or pigs on leashes at the park. We would of course say dogs because we hardly ever see pigs on leashes, so this does not come quickly to mind. There is a study showing that the amount of deaths due to asthma and drowning was drastically underestimated by the public. These sorts of deaths don’t get as much news coverage as deaths from tornadoes or fireworks that get much more media attention [also relates to example for the third elaboration of reason]. Elaboration of Reason Example Gilbert shows how stores take advantage of this idea with “price cut” tags to show their intended audience that the price now is better than what it used to be. Elaboration of Reason Example A change in perception and personal context can affect the ability to make good decisions. The example about the lottery tickets shows how people are more hesitant to play a lottery if nine of the ten tickets are owned by one person (rather than nine other individual people). The change of context affects our decisions, even though the odds of winning were still the exact same. Example Once again, Gilbert introduces an example to show how stores take advantage of this concept. They know people generally go for the mid-range wine so they will put a very expensive bottle out on the shelf for comparison. This changes what a medium-priced bottle was previously considered, resulting in us spending more money. Gilbert introduces an example about comparing US Presidents. He claims some candidates seem better or worse than they actually are because they are being compared to Presidents before them. This shifting comparison changes how we make our decisions. Example Gilbert also explains how we predict how well foods such as potato chips, spam, and chocolate will taste by comparing them to other palatable foods in the same area. Even though we are subliminally comparing the two foods based on what we see in the room, it doesn't make a bit of difference and all the food will taste the same no matter what comparisons are made.