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Fruit or Chocolate ? March 24, 2006

Posted by Sharath Rao in economics, ideas.
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I was recently writing a mail to the group about “delayed gratification” ( in response to Sandeep Bhat’s question about leaving Infosys ) and here comes an article that is slightly related. This is an article on behavorial economics – on why we humans aren’t always rational ( mostly in the economic sense ) and how economic models that assume rationality in human decisions can be quite off the mark.

 

Two excerpts from this article suffice if the gist is all you care about.

 

“People very robustly want instant gratification right now, and want to be patient in the future. If you ask people, ‘Which do you want right now, fruit or chocolate?’ they say, ‘Chocolate!’ But if you ask, ‘Which one a week from now?’ they will say, ‘Fruit.’ Now we want chocolate, cigarettes, and a trashy movie. In the future, we want to eat fruit, to quit smoking, and to watch Bergman films.”

 

People say they want to save for retirement, eat better, start exercising, quit smoking—and they mean it—but they do no such things. Victims who feel they’ve been treated poorly exact their revenge, though doing so hurts their own interests.

 

 

Complete article here. Linked from Amit Varma at India Uncut.

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