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Today, man sits atop the food chain, picking steak from his teeth with toothpicks made out of more steak. But instead of spraying champagne into one another's eyes while chanting "We're #1!" at zoo animals, we've taken up a new pursuit: getting rich. The good news is that, despite what 50 Cent may tell you, we generally don't die if we lose. The bad news is, evolution hasn't exactly helped us adapt to this new lifestyle, and as a result your brain continually tells you to do some things that will keep you poor forever. For instance, your brain... #6.
Thinks The Future Is an Urban Legend
Back when natural selection stopped picking us off for things like "thought that grizzly bear just wanted a hug," the future was far less reliable. Back then, when you had to choose between eating a rat now or holding out for deer a week from now, your brain told you to make with the rat stew. And it was right! Being able to imagine how good a deer would taste in 100 days had no evolutionary advantage, and so we just never got around to being good at it.
Today, the future is about as predictable as it's ever been. If the government guarantees to pay you $200 when you turn 65, there are laws in place that say they have to do it. But our brains don't know that. So when a guy in a white lab coat walks up and offers to pay us $100 in a year, or $50 right now, our brains still tell us to go for the rat stew.
This is what's called hyperbolic discounting, a scientific term that means your brain is about as far from rational as it can get before they're legally required to keep you in a zoo enclosure. We're only half kidding. Hyperbolic discounting puts us on the level of pigeons and rats in the realms of fiscal responsibility. It's not just a lab experiment. There are entire industries that rely on your inability to think rationally about the future. Our whole economic crisis was kicked off by borrowers taking on loans they couldn't afford, after lenders offered them lower payments (or no payments at all) for the first year. Credit card companies still rely on your brain to make purchases now that you won't be able to pay for at the end of the month. Top Gun drill sergeants rely on your ego to write checks that your body can't cash.
The real pioneers in the art of hyperbolic discounting are the cigarette companies and drug dealers, who do a pretty swift business delivering a momentary and fleeting fix in exchange for a little cash, and the right to bankrupt or murder you at some point down the line. We're pretty sure not even the pigeons would go for that deal. #5.
Believes It Can Use Its Own Stupidity as a Time Machine
But hey, we're nothing if not resourceful, right? Back when your genetic line was sailing around in the man pouch of a hunter gatherer, you only made it through a long winter by making every last deer testicle count. How can that be a bad thing? Well, that's left us with a brain that's really worried about making sure we don't waste money we've already spent, or as it's known in the field of economics, "money that's not fucking yours anymore."
For instance, let's say you're in the market for a replacement computer, and the best thing for what you want is a $500 PC. However, you've always been a Mac user and recently dropped $600 on a wireless Apple keyboard (yeah, you went with the cheap one). Now, even though you like everything better about the Dell (it comes with its own wireless keyboard that wasn't built for someone with tiny, elf-hands), and it's twice as cheap as the nearest Mac equivalent, your brain will tell you not to waste the money you spent on the keyboard. So, in the name of not letting the keyboard go to waste, you buy the Mac.
This is what's known as the sunk cost fallacy: a mechanism in your brain that tells you to spend money on something, simply because you've already spent money on it. In the above scenario, if you were a perfectly rational being, you'd realize that the ship has sailed on that $600, and it had every cent of every purchase you've ever made on board. The only thing that should figure into any economic decision is the money and possessions you have in the present tense, and how they can be best used to make your life better in the future. But thanks to the way your brain is wired, you're likely to go about this exactly backwards: screwing over your future self in order to stay loyal to decisions you made in the past. #4.
Won't Let You Get Rid of Useless Shit
But wait a second: Why not just buy the Dell, then go on eBay and sell the useless Mac keyboard? Nothing wrong with that in theory, right? Fits perfectly with the "making your current possessions work for you." But something in you resists the idea. As a result, you're about to get screwed again thanks to the disposition effect. This is the brain mechanism that tells you to wait for a better price on something that, in reality, will never go up in value. Investors suffer from this all the time; when a stock is losing value, instead of selling it and taking what they can get, they hold onto it. It's not optimism that it's going to go up (they'll do it even if all evidence says it won't) but rather being too pissed off at the idea of selling it for less than they paid. Of course, this means your brain is much more likely to sell off a good investment, like say that comic book some chump is willing to pay $20 for.
It's the same impulse that makes people hoard useless stuff, unable to grasp the fact that it'll never be useful again. How many of you have cardboard boxes in the garage or basement full of dusty old hard drives and video cards, as if that shit is going to come back in style one day? Here's another industry profiting off our malfunction: self storage companies. Yep, your brain is apparently perfectly willing to pay $200 a month to store a bunch of useless crap you no longer want or need, instead of just selling it or doing something REALLY tacky, like donating it to charity.
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I was both excited and saddened by the fact I own that issue of Skate Man ( was there ever a #2?)
yes, and i'll sell it to you for $700.
I love people that think there's some sort of pattern to which lottery numbers come out. It's random. There is no pattern. They're basically rubber balls in a drum. There's just as much chance of 1 2 3 4 5 6 coming out as there is 8 13 18 22 33 45. Anyone that claims they have some way of predicting the numbers is either a liar, or they've rigged the game. If they weren't a liar, they'd be cleaning up on the wins regularly, not peddling a book of bulls**t to desperate people.
#3 is exactly what PC games un-teach you(you get that right,I can't bear consoles). people have to play more or they stay the cattle they are now. look at the "Two and a half men" series, they eva heard of internet?
Awesome article
Great article. One of the best. And every point is true.
I love people that play slot machines. They think if they keep feeding cash into the slots, or someone else, that it will get "hot." The machine will then reward them for being stupid for so long and give them the jackpot. Also people that buy lottery tickets. They always say, "Well someone has to win it!" I always tell them look at the odds at the ticket. "1 in 1,000,000,00? Yes, there's still a chance!"
Having done and scraped through an economics degree, I was aware of all of these, and being aware of them helps you avoid it. A bit. It's worth mentioning that 5) isn't entirely bad, the longer in the future, the bigger the risk the future won't happen. People die while perfectly healthy of heart attacks, strokes, car accidents, social meltdown, revolution, hurricanes that your world leading economic superpower country couldn't be arsed to spend money on protecting against. However it's arguable we over compensate for uncertainty.
The rest of it is stuff anyone who did an economics degree and tried to apply it to real life will have noticed. Most of us know we do this s**t too. The whole article could be summed up "we don't take a step back and look at it". If someone offered me $100 in a year or 50 now I'd take the hundred, if someone offered me 99 now or 100 then, I'd go with 99. (Savings interest, risk of things going tits up etc). This is rational. With most of these decisions there's an element of sense but people just loose track of the bigger picture and take it too far. What if you sunk $800 into a nice keyboard and needed to spend $50 more on an imac to enjoy it? Still a bad decision (I'm assuming it will still have some non PC functionality like helping you bed hipster girls, or guys, or something) Maybe it's worth taking the imac over the dell? Of course the smart person spends 2 or 3 hours learning to build a PC (and another 2 or 3 building it) or asking a PC savvy friend and saves $400, builds their own, and realises that's more than they'd have earnt if they worked overime in those hours. Well played. Of course this article is right and it still amused me, we all do dumb things because we make stupid mistakes or fail to see the big picture. However to sum it up like that is about as boring and dry as this comment.
Give your degree back, you are stupider now for opening your mouth then before. While people are dying of "social meltdown" they should probably keep an eye out for erupting volcan's, hords of zombies and dragon spawn. The good news is that "your world leading economic superpower country" (insert country of choice here) has larger fish to fry then protecting us against heart attacks and hurricanes.. but you'd know this having "scraped" through an economic degree. Is it possible our "over compensation for uncertanty" would come in the form of "insurance" (i know right, crazy) and Insurance would also be a form of... (drum roll) protection and security in the case of the above (minus the zombie invasion)which is kind of associated with your "world leading economic superpower country's" plan for "protection" and security. "the rest" though, would probably make more sence to impliment then "notice" but bravo for the insite and i'm greatful you didn't send this via paper so another tree wasn't wasted, and the global warming can wait another day.. Great choice with logical thinking also, though i assume most people can see that $100 aposed to $50 is a greater deal.. But you never know. Not too sure about the keyboard though, having studied economics i'm sure you ment investing the money and collecting on interest (Why buy the keyboard when you can buy the company). But then again.. my comment is no more interesting then your own.. why did i spend 10 mins of my life replying to your lame ass comment....
So you typed a whole, almost unreadable paragraph (due frighteningly poor use of punctuation, spelling and grammar) to chastise this guy for posting his opinion while not offering any real arguments to support your position other that you think you are right and he's wrong? Props for noticing the inaneness of your own reply before posting it, shame on you for clicking the submit button anyway.
Nice one!
@ kaytopher, no because the ball still has a 50/50 shot of landing on red or black with every new turn. The ball isn't cognizant, it doesn't know where it landed before.
Dan, one of the best articles on here that I've read. Great job!
Isn't the bit about the roulette table landing 3 reds in a row make the possibility of the next one being black higher?
no, it's not.
if you play a roulette wheel all night you won't see a perfect red-black-red-black-red-black-red-black-red-black (if that would happen the wheel is rigged and you should call the cops). instead it will be more like 2red-3black-red-black-2red-5black-red-black-2red. if you play like 100 times it would be strange if you would NOT have a row of 4 or 5 of the same color in there somewhere.
"if you play a roulette wheel all night you won't see a perfect red-black-red-black-red-black-red-black-red-black (if that would happen the wheel is rigged and you should call the cops)."
Fix: if that would happen the wheel is rigged and you should take them for all they are worth.
Was this a Dell commercial or an article on stupid things we do without knowing it?
DELLS ARE *GREAT.*
BUY ONE.
RIGHT.
NOW.
Macs are better.
""Pedal to the Medal"?
Seriously?
Ruined the whole thing. "
I completely missed that, Oh well, the joys of dyslexia.
I quite liked this article. You can take the man out of 3 million years of evolution but you can't take the 3 million years of evolution out of the man.
Or something like that....
well then whats wrong with me? i had a car i paid 250 for, and it was going to cost 300 to fix it, so i junked it...alot of these things didn't apply to me
maybe you could get another car (that was not broken) for 250?
That is exactly why the casinos designed those boards that show the numbers that have been rolled. People become convinced that the last few spins will give them better insight as to what is going to happen next, so they are more willing to put down larger sums of money, because they feel that 'red is hot right now', or whatever the case may be. As soon as they started putting those boards up, they started bringing in more money at the roulette tables. The best thing to do is to play the odds, putting even money on two of the three rows, and never changing your bet. If you even look at the board and use it to change your betting, you instantly put yourself at lesser odds. You will still be likely to eventually lose, but you have a much better chance of slowly earning chips. The hard part for me is walking away once I'm winning.
I don't agree, and neither does Las Vegas: there IS a "streak" to roulette ball patterns, that's why every third or fourth spin (or so), Vegas Casinos switches out the operator! You're dealing with body mechanics, which has a "finite" number of variables, and has "some" predictability. Casino must have analyzed this and don't want to lose money so they implemented the operator switch. Or so I think.
What crap. A single hand rolling a ball onto a table will have hundreds of bilions of mechanics and even if two roll in a row were identical in body form, the air pressure, wheel posistion, wear on the ball would create billions more. Humans see streaks because they want to and if your bulls**t idea was correct the casinos would take the boards down. They want you to lose.
i would think the whole 'change the operator' thing is actually meant to reinforce the notion (to their gamblers) that there would be such a thing a a 'winning streak': they make money from these logical fallacies, so the last thing they'd want to do is laugh them away.
@get_awesome: it doesn't matter if you would play red-black-red-black-red-black all night, or just play red-red-red-red all the time or look to the boards and subsequently play the color that won the last round (or the opposite color). your method of 'sticking with the same numbers until they win' is just another logical fallacy the casino will love to exploit.
it is different for games where you don't get prices like 'twice your bet', but instead 'half of the pot'(something like poker). in the latter case it MIGHT pay to watch those 'winning streaks': if your opponents also watch them and are stupid enough to believe that the cards will follow some non-random pattern you can use that against them, giving you a slight advantage
@get
you probably read something about 'morons who use those boards to play' and concluded that those 'systems'(like wait for 3 in a row and then bet on that color) would lower your chances. well they don't: you'll still have the same 50/50 chance.
the casino also still has a 50/50 chance. the only reason to play into these gambling-illusions is because it makes people gamble more. it still gives the casino the same % of every $ on the gambling-table, they just want that table to be more loaded
"I don't agree, and neither does Las Vegas: there IS a "streak" to roulette ball patterns, that's why every third or fourth spin (or so), Vegas Casinos switches out the operator!"
Y'ever think the table operator simply needs to go take a leak?
thats good, for a second there i thought i was f**ked.
So logically, because there is less than 50% chance of winning at roulette due to the 0 and 00, if I bet against what I think is going to win each time, I will end up on top. To the casino!!
lol (at least i hope you were joking)
So basically, this was written after taking the class "Microeconomics in 1 Hour". Sunk costs, greater fool fallacy, gambler's fallacy.
Plenty of people didn't take that class. The fact that YOU already know these things makes you far better at the Internet
Unless you're an olympic champ who leaves his medals on the floor of his car, "pedal to the medal" doesn't make sense. Granted, "pedal to the metal" doesn't make a whole lot of sense either, unless your car is unupholstered, but that's the phrase, nonetheless. Great article, by the way!
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Also, this isn't so much showing that you're genetically programmed for logical fallacies as it is that capitalism is an artificial system that does not abide by reality and is also probably trying to f**k your mom. But whatevs right.