We cannot avoid generalizing, but we sometimes get it wrong (and even if we get it right, we may be making a faux pas) — One of our superpowers is that we can make assumptions about something or someone we have never encountered before. Based on certain observed, or known, characteristics, we expect other characteristics to be present too. We almost literally fill in the blanks, by generalizing the co-existence of two different traits: if…

We have two mechanisms that help us make decisions. Even if they oppose each other, they can serve us well, especially for reconsidering choices made earlier — What do a fictitious character from a radio soap, and two politicians — one British, one Belgian — have in common? …

Economic thinking can help a lot with everyday decision making, but some choices are beyond its capability. Or are they? — Many of the decisions we make — from the trivial to the hellishly complicated — can be reduced to one of two types. One corresponds with the question whether a particular choice is a sensible one or whether the alternative is better. …

One of the cool functions of money is that it allows us to express our preferences in a remarkably refined way by means of our willingness to pay — but it is not always that simple — Preferences are a relatively recent phenomenon. Even our not-so-distant ancestors didn’t bother much about them. Preferences are only relevant when there is choice, and when there are trade-offs to be made. They didn’t have Netflix, a vast range of breakfast cereals, or numerous clothing brands. …

How can we estimate the importance of the role of luck on individual success? — Andrew Carnegie was an exceptionally lucky man. The fortune he amassed, adjusted for inflation, amounted to about $310 billion, give or take a few billions, putting him firmly in the top-5 of all time richest individuals. To accumulate such wealth in a lifetime is simply impossible through sheer hard work…

When might we opt to refrain from doing something that would serve us well? — A few weeks ago, the light bulb in our oven popped. It is one of those insignificant items whose utility you don’t fully appreciate until they cease functioning. Not only does it actually help you track the duck-roasting or cake-baking progress without requiring a torch, it is also a handy…

The hardest, and the most significant choices we make are those that involve good and evil. Those are also the choices that signal the clearest who we really are. — There is no getting away from moral considerations in our everyday interactions. Many of our choices have moral implications, from whether we purchase the fairtrade soap or coffee rather than the cheaper standard variant, to whether we tell our boss a little white lie to explain our tardy arrival rather…

“The facts speak for themselves”, they say. But do they really, or are we just hearing what we think they’re saying? Maybe conclusions and decisions “supported by facts” are not necessarily as robust as we like to think. — The other day, a couple of interesting tweets zoomed through my timeline. The first one contained several images of newspaper headlines to the effect that millennials (people born between 1981 and 1996) are having so few children because they cannot afford to. The second one simply listed some apparently related…

When essentially the same item is sold at different prices, framing matters — a lot — to how it is perceived. — There is a classic behavioural economics finding from 1983 research by Nobel laureate Richard Thaler involving beer (I wrote about it here). Briefly, it features two parched people on a beach, and explores what they would be willing to pay for a cold beer. If the only place where it…