Tuesday, January 11, 2011

Humans Rarely Choose Things In Absolute Terms

The words in title of the post were written by Dan Ariely in his book "Predictably Irrational". I write it in context of the previous post Relative Value Of Currency Protects US Credit.

Further on Dan explains:
... most people don't know what they want unless they see it in context. We don't know what kind of racing bike we want - until we see a champ in the Tour de France ratcheting the gears on a particular model.

Should I think of Chinese, Japanese and bankers buying US debt in the context of Germany's apparent prosperity? By the way, Chinese and Japanese do it with Eurozone debt too ...

But Dan also noted:
RELATIVITY IS (RELATIVELY) easy to understand. But there's one aspect of relativity that consistently trips us up. It's this: we not only tend to compare things with one another but also tend to focus on comparing things that are easily comparable - and avoid comparing things that cannot be compared easily.
I see also this relatively ... bullying cognitive dissonance.

And one more concluding from Dan:

... the more we have, the more we want. And the only cure is to break the cycle of relativity.

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