TED-Ed: The psychology behind irrational decisions - Sara Garofalo

The video explores decision-making through scenarios involving bonuses and penalties, highlighting the concept of loss aversion. It explains how loss aversion, a cognitive bias, affects our choices by making losses feel more impactful than equivalent gains. The video also delves into heuristics, mental shortcuts that can lead to errors like the conjunction fallacy and anchoring effect. While heuristics have historically aided quick decision-making, they can result in biased choices in complex modern contexts. The video encourages awareness of these biases to improve decision-making.

Discuss the anchoring effect and its implications in decision-making.

Why are heuristics considered both beneficial and detrimental in modern decision-making?