This paper investigates whether people are equally irrational in finance and everyday decisions by examining the responses of a 20-question survey conducted at Pace University. Results from our data indicated that we could not conclude that people are more irrational in one area more than the other. People appear to be equally overconfident in both. Testing for frame versus substance, the second set of data; the t-test signifies that people are more irrational in their finance decisions than they are in their everyday decisions with more than 99% certainty. The third and final category of responses were tested for problem solving: in other words are people more rational in solving problems, such as "Montay Hall" questions, in finance or everyday. From the t-test results we were not able to conclude that people are more irrational in their finance decisions than they are in their everyday decisions. The test did however confirm previous research that people, given a second opportunity, usually do not choose to change their first response even if by calculating the probability it is the more rational decision. It seems reasonable to obtain different results for different decisions making traits. On the basis of these results we conclude that although people are irrational in general they may be more irrational in finance or everyday depending on the irrational behavior being examined.
Kats, Milena , "Are We Equally Irrational in Financial and Everyday Decisions?" (2006). Honors College Theses. Paper 44.