The Myth of Rational Thinking

myth of rational thinking

by Kay Torrance

Greg Berns doesn't want you to make a decision by yourself. He doesn't trust you.

People don't make rational decisions, he contends, and you are likely to muck it up. Don't be offended by his reasoning, though. He says that there are biological reasons why we all get it wrong.

Just by way of his resumé, Berns would seem likely to make better decisions than a lot of us. He’s a poster boy for overachievement, with degrees in physics, biomedical engineering, and psychiatry. He’s written two books on decision-making. Yet he too knows that he makes decisions like everyone else. He’s vulnerable to the influence of irrational thinking, the emotional sway that invades his—and everyone else’s—reasoning.

He has built a career researching what goes on in the brain when people formulate decisions. Now he’s started the Center for Neuropolicy with the goal of giving policymakers in the economic and political arenas a bit of neuroscientific enlightening.

"In the long term, I hope the center will elevate neuroscience and attract some attention to how the brain works," he says. "The task is to get the bureaucrats to care."

The brain on economics

Berns, an Emory psychiatrist, is riding the new bandwagon of neuroeconomics. It’s a relatively young discipline that’s a blending of neuroscience, economics, and psychology, all combined to develop findings around how the brain makes financial decisions. Early on, neuroscientific researchers began looking at why people made the financial decisions they did, mostly because economists had gotten it wrong.

Economists had long assumed that with proper information or instruction, people would make good financial decisions, systematically and without emotion.

"We know from studies that people don’t make rational decisions," Berns says. "The problem with economic models is that they assume a certain level of rationality by people, that people will maximize their benefits."

Add into the mix that most of us don’t know that we are irrational, says Emory economist Monica Capra, who is a member of the center. People believe they themselves are rational, even if everyone else isn't she says.

We want to minimize energy needed to make a decision so we use rules of thumb. We also tend to overweigh low probability and underweigh high probability.

One case in point: Why do we still save too little and spend too much even when we know the consequences? Are we just not listening? To get some answers, economists began reading what the psychologists and neuroscientists were finding.

Since 2002, when psychologist Daniel Kahneman of Princeton and economist Vernon Smith of George Mason University were awarded the Nobel Prize in economics, neuroeconomics has been gaining traction. Centers for neuroeconomics have opened in universities in the United States, Europe, Israel, and Japan. The first scholarly neuroeconomic journal appeared in 2008, and another is planned. The first edited textbook on the subject appeared last fall, and the Wall Street Journal debuted its first neuroeconomic columnist last July.

Neuroeconomists have essentially redefined some economic models, says Elliot Bendoly, an information systems and operations management specialist at Emory and a member of the Center for Neuropolicy. 

Economic models affect the debate in Congress, and how we live, he says. It's not that people are deviating from the ideal economic model, it's that the ideal is wrong. The hope is that as economic models develop, they incorporate human behavior.


Humans are myopic. We have a hard time conceiving of ourselves one year from now, much less 20 or 30 years from now. There's no incentive to make long-term decisions."

Greg Berns, director of Emory’s Center for Neuropolicy


How the brain affects policy

Berns would like to take neuroeconomics a step further to boost the effectiveness of policy-makers. If policy-makers understood how they make decisions, they could stop wasting time on ineffective legislation. (For example, cigarette taxes have been less successful in convincing people to stop smoking than social pressure, Berns says.) 

Policy-makers tend to act when consequences come into the present. Berns points to global warming as an example. Many see global warming as a long-term problem, but so far governments haven’t done much to stem it. 

"Humans are myopic," he says. "We have a hard time conceiving of ourselves one year from now, much less 20 or 30 years from now. There’s no incentive to make long-term decisions. That’s a problem in this country."

Blame our myopic nature on dopamine, a chemical in the brain that either increases or reduces the activity of nerve cells. Dopamine is called the "pleasure chemical," but Berns tags it the "chemical of anticipation." Dopamine affects brain processes that control emotional response and ability to experience pleasure and pain. "Dopamine is like crack," he says. "It’s here, and then it’s gone."

Myopia, though, can be overridden by focused attention, Berns says. "We can make projections, but the question is how to bring them into the consciousness of the people you are trying to affect," he says. "I don’t have the answer for that. Collective decision-making is political, but politics are biologic. The human brain evolved to function in social groups. By discovering how our brains are wired to behave in group settings, we can begin figuring out solutions to problems of global impact."

Berns started making the rounds in intelligence and military communities in December. His center and the U.S. Air Force hosted a conference  to spur interest in research collaboration. One topic of discussion was how abstract social values, such as religious and political ideologies, become distorted in the brain and subvert basic self-survival value judgments, which occur in war and terrorism. 

Ideological values are "sacred," have no monetary value, and therefore are powerful in their emotional pull. Are there circuits in the brain that predispose people to fall into certain groups? Do political ideologies tap into those circuits? 

The answers to those questions, Berns hopes, will lead to more effective government. We have the technology to solve our most daunting problems, but "the real problem is human nature," he says. EH

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