Fame at last - watch me debating some libertarians
My panel on behavioural economics from earlier this year is now available at WorldBytes. Thanks to The Lantern Group for spotting this before I did.
Introducing System 3: How we use our imagination to make choices
In recent years we’ve become used to thinking about decisions as “system 1” or “system 2”. System 1 choices are automatic decisions, made without thinking, based on an immediate emotional or sensory reaction. System 2 is used to stop and rationally calculate the consequences of our choices, and determine the best cost-benefit tradeoff.
But these two processes don’t capture every decision. Indeed they might only encompass a minority of our daily choices.
Recent work in neuroscience and psychology has discovered another way of making choices: with the imagination. Customers imagine their possible futures: the outcomes they would experience after a choice, and how those outcomes will make them feel. The future that makes them feel happiest will be the one they choose. These choices use different parts of the brain than System 1 and 2. They are called System 3 choices.
Think about how you might buy a car. System 1 would suggest that you see a colour, or shape, or brand of car, immed…
But these two processes don’t capture every decision. Indeed they might only encompass a minority of our daily choices.
Recent work in neuroscience and psychology has discovered another way of making choices: with the imagination. Customers imagine their possible futures: the outcomes they would experience after a choice, and how those outcomes will make them feel. The future that makes them feel happiest will be the one they choose. These choices use different parts of the brain than System 1 and 2. They are called System 3 choices.
Think about how you might buy a car. System 1 would suggest that you see a colour, or shape, or brand of car, immed…
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