A financial psychologist’s version of the 80/20 rule

Nudge readers know all about the two-sides of the human brain theory, System 1 the intuitive side prone to making snap decisions based on emotions and heuristics, and System 2, which relies on slow, cool logic. How many of our decisions each side is responsible for may not be knowable, but a financial psychologist named Brad Klontz is willing to make an estimate.

“It’s a scary time,” Mr. Klontz said. “The emotional part of the brain makes 80 percent of the decisions, and when it really gets activated, it shuts off rational decision-making. It’s lemmings going over a cliff.”


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