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Thursday, November 25, 2010

Nudge: Post #5

Rules of Thumb: We’re all busy and don’t have the time to reflect on the perfect choice, so we use what the authors call “rules of thumb” guidelines. Like when I look at the Beltway (around Washington, DC) and see it’s completely backed up. I have an automatic audible play that loops me around to a secondary road. The authors note several nudging elements in such rules of thumb situations—I’ll mention two: Anchoring and Availability. Anchoring tells us that if we’re hungry we shouldn’t go shopping…our temporary anchor (hunger) makes us want to buy more. Availability is similar to anchoring in that if we have a readily available relevant example of a fearful event in our minds, we’re more likely to overreact to a choice in front of us. For example, we hear in the news much more about homicides than suicides, so we wrongly believe that more people die from homicide. So, our brain responds based on what kind of reference points it starts from. No wonder so many of us make bad choices.

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