Humans are lousy at making correct rational decisions in life. The brain is easily tricked by things that only matter to the irrational part of the brain. For example, people prefer to get $50 now rather than $60 one month later because being patient is rational. When told an item is now on sale, people think they’re getting a good deal even though they wouldn’t have paid the sale price before finding out about the sale. People fear terrorism but not swimming pools even though you are many many more times likely to die in a swimming pool than in a terrorist attack (this is also why terrorism is so powerful a tool).

The author of the great book, Stumbling on Happiness, gave a talk at TED that talks about these things:

http://video.ted.com/assets/player/swf/EmbedPlayer.swf

One of the points he makes is about comparison-shopping. This is something I learned years ago. Just in the last year, I’ve had several conversations about people who are thinking about buying a new TV. When I tell them that I just go to Amazon.com, sort by best-selling, read the reviews of several items and buy one, they think that’s dumb. They believe going to the store to compare TVs side-by-side is the smart way to select a TV. I always say “But when you’re at home watching it, you never remember that other TV in the store”. I think I save a lot of money (and time!) this way and Daniel Gilbert explains why.