Bounded Rationality and Our Failure to Recognize Our Own Incompetence
Who makes the best decisions for you? You? Are you sure? When you were young, you most probably had dreams of growing up and becoming successful in your chosen field, but did you always make the decisions that best maximized your chances of achieving that? Let’s say you wanted to grow up to be a doctor, did you always do your biology homework and study hard for all your exams or did you have to rely on threats of being handed detention by your teacher or grounding by your parents? Now going back to the opening sentence, who makes the best decisions for you? Still you? Some of you might argue that with the previous example; you were too young and immature to make optimal decisions for yourself. If you believe this, then may I propose the following question: Do you wish to have a financially secure retirement? If yes, how likely are you to adequately save enough during your working life for your pension if government-enforced social security schemes didn’t exist? The empirical studies o