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Two men balancing on a wall with the sea in the background
Two men balancing on a wall with the sea in the background
Featured image: UlyssesThirtyOne CC BY 2.0

Almost all decisions we face have a tipping point — the point where we would change our mind. Good decision-making means working out where it is.

This is a time of tough decisions. Many governments face rapidly rising COVID-19 infection rates, and are desperate to bring the outbreak back under control. A lockdown, with only shops considered of vital importance are allowed to open, and the default for everyone is to stay at home — even if only for a limited time, to act as a so-called circuit breaker — is perhaps the most effective way of stemming the alarming increase in COVID-19 cases.

But even three or four weeks of lockdown would come with considerable costs. It would further damage economic sectors already very badly hurt by the pandemic so far, such as retail, hospitality and entertainment. It would also have adverse public health consequences (notably for mental health) and impair social interaction with friends and family (including with vulnerable people). …


Man making the ‘money’ gesture
Man making the ‘money’ gesture
(featured image: kues1 via Freepik)

Most of us don’t only work for the money. But should that influence how much we get paid?

Many years ago, one of my daughters once asked me why everyone did not earn the same amount of money. Wouldn’t it be fairer if everyone just got the same? After all, if it’s someone’s birthday at school and they bring sweets for the class, they are divided equally among everyone.

I explained that not all jobs are the same. Some are really hard work, or unpleasant, or dangerous, or they mean that you need to work at night or over the weekend. People may not want to do a job carrying heavy loads all day, cleaning sewers, installing aerials on tall buildings, or driving trains at 5am unless they get paid a bit more than jobs where all you need to do is sit at a desk and tapping on a computer keyboard all day. …


A guy looking skeptically to the reader
A guy looking skeptically to the reader
(featured image: Johnny Worthington CC BY)

How we think matters more than what we think and who we are

From the moment we’re born, to understand the world, we rely on the judgement of others. Our parents, our siblings, our friends, our teachers, our colleagues, our boss, our political leaders, the media, social media, and so on — they all help us figure out how things hang together. There are two main reasons for this: others know facts we don’t know, and they may also be better than we are at transforming those facts into a judgement.

But not everyone’s judgement is equally reliable. Their own factual knowledge may be inaccurate, or their competence in interpreting the facts may be imperfect. We learn to understand this, and we learn to trust (and indeed to mistrust) some people more than others. …

About

Koen Smets

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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