What bad design can teach us about investor behaviour

Shower controls and Jet Lag I am currently reading a book on design called The Design of Everyday Things by Don Norman. As opposed to the usual sources of reading recommendations from friends, websites top 10s or the ubiquitous Amazon recommendation engine, I came across this book when letting off frustration on google. Let me explain. For a long time, my professional designation was “management consultant”, a profession that gets its fair share of eyerolls and wisecracks, not unlike… “If you see a consultant on a bicycle, why should you never swerve to hit him? It might be your bicycle.”

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Are you a humble decision maker?

Let’s say you were offered a game where you picked one of two choices: A 95% chance to win ₹1,000,000 OR Certain offer of going home with ₹910,000 Classical economic theory suggests the value of #1 exceeds that of #2 by ₹40,000 (0.95 X 1,000,000 = 950,000) and therefore should be the choice of every “rational economic agent”. But it’s safe to say almost everyone offered this choice would pick the certain offer, #2. Could it be that we don’t like uncertainty and are willing to pay ₹90,000 to eliminate it? Now consider a game with a different set of choices: Certain loss of ₹900,000

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Are you a hedgehog or a fox?

I travel quite a bit in my line of work, and many of those are short trips to cities I’ve never been before. This means a fair amount of variability in my commute times. So, when I’m back home in Mumbai, travelling from home to my own office, I prefer predictability. Mumbai’ites measure travel in terms of time and not distance, because, depending on the time of day, innocuous sounding 3-4 km stretches of road could take the best part of an hour to navigate. For me, time spent in traffic is the worst possible use of one’s morning. I experimented

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