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Are humans irrational? If so, how can we build stronger institutions to compensate for human shortcomings in rationality?

David Ropeik argues that "The brain is only the organ for which we think we think. It's job is not to win noble prizes. And to pass math tests. It's job is to get us tomorrow. Its a survival mechanism.. and it plays a lot of tricks in order to get us to tomorrow. That worked pretty well when the risks were lions and tigers and bears… Its not as good when we need to rationalize and reason and use the facts more with the complicated risks we face in a modern age: climate change, genetically modified food, and unsustainable living on the planet.. That takes a lot more thinking. More cognitive, slow,more effortful thinking. That we are not instinctively built that way must be recognized if we are going to get beyond the risk of not being built that way."

http://www.youtube.com/watch?v=GDAzsZLvfPw

Dan Ariely provides further evidence that humans have irrational cognitive thought in his TedTalk and offers the following, "If we have these predictable, repeatable mistakes in vision, some thing that we are good at, what's the chance that we don't make more mistakes at something we're not as good at? For example financial decision making. Something we don't have an evolutionary reason to do, we don't have a specialized part of the brain, and we don't do that many parts of the day. The argument is that in those cases we make many more mistakes.."

In another TedTalk Dan Ariely provides the following food for thought, "Are we superman or are we Homer Simpson? When it comes to building the physical world we understand our limitations and we build around it. But for some reason when it comes to the mental world when we design things like healthcare, retirement, and the stock market we somehow forget the idea that we are limited. And i think if we understood our cognitive limitations in the same way that we understand our physical limitations we could design a better world."

Do you agree with them? How do we better structure institutions that can compensate for our shortcoming?

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  • Nov 14 2012: "Are humans irrational?"

    Humans were entirely rational in the world as it existed up to 10.000 years ago (except for religion). Since then the world has changed but the human brain hasn't. Our modern world is full of phenomena a prehistoric human would never have encountered, most of these are basically about statistics and logical fallacies.

    "If so, how can we build stronger institutions to compensate for human shortcomings in rationality?"

    Strengthen education in logic, statistics and math in general.
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      Nov 18 2012: Thanks much John. Fully agree. We seem to have not yet fully evolved to our increasingly complex social environment.

      Education in logic! That would be great. I feel like we dont have any of this really until college. Or selective biases have been well formed by then. Why couldn't we have this earlier in child education? Would love to see kids debating philosophy...

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