Posted: October 17th, 2013







The video is about control over making a rational decision. The video starts by showing a few visual illusions that people use in making decision such as the table example where one thinks that the vertical table is longer than the horizontal table while the truth is that they are equal. It turns out that illusions affect how people make decisions. The video shows some cognitive illusion where he uses the example of organ donation program. In this case, people do not make a rational decision. Rather, they make the decision depending on the illusion. In the countries where more people joined the program, the statement at the DMV was, “check the box below if you do not want to participate in the organ donor program.” In this statement, people do not check which means they joined. In the other statement, it read as “check the box below if you want to participate in the organ donor program.” People do not check which means they do not join. The people making the decision were influenced by the illusion rather than their rational thinking.

The video does relate to utility theory where the presenter says that people are not aware of their preferences when it comes to consumption. In the example of the subscription fee to the Economist magazine, many people went for the third option where they would get both services. However, when the second option of print on its own was removed, most people went for the first option. Although nobody wanted the print option on its own, its existence there served to make people aware of what they want. In this case, the customers were rational when the second option was there. However, when it was removed, they were not able to rank the value of the service to make a rational decision.

I do agree with the video’s ideas about making irrational decisions. In many instances, a person is influenced by the illusions in advertisements or deals such as the one presented in the subscription example. The illusions prevent people from thinking before making decisions as well as the defaults. The content of the video serves to show how people make decisions especially when it comes to economics. In the first example of the tables, people thought they were equal in terms of length just by looking. None could have decided to measure in order to make a rational decision about the lengths.

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