Behavioral Economics Theory
Irrational decision making is reflected in the field of behavioral economics and the work of Dan Ariely. The focus of Ariely’s work is heavily finance centered, but the concepts that drive people to make seemingly irrational decisions can be applied to the field of coaching and the work of Gilbert. In Predictably Irrational Ariely explains the brain’s need to function within a framework of comparisons. Just like Gilbert’s regret scenarios, Ariely emphasizes the brain’s need to make comparisons in order to take action. Ariely uses the example of a lawnmower.
When a brain encounters a store with only one model for sale, it struggles to determine the lawn mowers value. Is $3,000.00 a good or bad price? If one left the store without making a decision, Gilbert might hypothesize that she would experience regret since her brain lacked a context for the value of a lawnmower making her unable to foresee a positive outcome and take action in making a purchase. If she is shopping in a store with two models of lawnmowers, the one previously mentioned and one with slightly better features, but nearly double the price, the decision to purchase the $3,000.00 lawnmower becomes clear. She can take action, and the feelings of regret are not experienced. Human brains are hardwired to compare things, and the brain will make comparisons most easily and as lazily possible. (Ariely, 2010).
