Imagine you spend $20 on a movie ticket. Ten minutes into the movie, you realise it is terrible. You aren’t enjoying it, and you would much rather be doing something else. Would you leave? A lot of people wouldn’t. Instead, they might think, “I’ve already paid $20. I might as well stay.” But that $20 is gone whether you stay or leave. The decision you actually have to make is whether the next two hours are worth spending watching a movie you don’t enjoy. So why do we stay? The answer is that being intelligent doesn’t necessarily mean being rational. This article will talk about why intelligent people can make irrational decisions.
Intelligence vs. Rationality
We often assume that smart people naturally make smart decisions. Someone who gets excellent grades, solves difficult problems, or understands complicated ideas should surely be better at making decisions.
But intelligence and rationality aren’t the same thing.
Intelligence is largely about our ability to learn, understand, reason, and solve problems. Rationality, in decision-making, is about using information and logic to make choices that actually serve our goals.
A person can be extremely intelligent and still fall victim to the same psychological biases as everyone else.
In fact, sometimes being intelligent can make certain biases harder to notice. We are very good at finding reasons to justify decisions we have already made.
Our brains aren’t perfectly logical machines. They’re designed to make decisions quickly, often using mental shortcuts called heuristics. These shortcuts are incredibly useful, but they can also lead us astray.
Here are a few ways this happens.
The Sunk Cost Fallacy
Let’s go back to the terrible movie.
The reason you might stay is the sunk cost fallacy: the tendency to continue something because you have already invested time, money, or effort into it.
The problem is that the $20 is a sunk cost. You can’t get it back.
The rational question isn’t:
“I’ve already spent $20, so should I stay?”
It is:
“Knowing what I know now, would I choose to spend the next two hours watching this movie?”
This happens constantly in everyday life.
You might continue reading a book you hate because you’ve already read 200 pages. You might keep playing a game because you’ve spent months getting good at it. A company might continue investing money into a failing project because it has already spent millions on it.
The amount already invested shouldn’t determine what you do next.
But emotionally, it often does.
Confirmation Bias: We Don’t Always Want to Be Right—We Want to Feel Right
Imagine you decide that a particular phone is the best phone on the market.
You start researching it.
You find ten positive reviews and three negative ones.
Which ones are you more likely to remember?
Probably the positive ones.
This is confirmation bias: our tendency to notice, interpret, and remember information in ways that support what we already believe.
The strange thing is that we often aren’t consciously trying to fool ourselves.
Once we have an opinion, our brains naturally pay more attention to information that fits with it.
This can affect everything from the products we buy to the people we like to the opinions we form.
It can even affect arguments.
Instead of asking, “What if I’m wrong?”, we ask, “How can I prove I’m right?”
Those sound similar, but they’re completely different approaches to thinking.
When Everyone Else Is Doing It
Humans are also extremely influenced by other people.
If everyone around you suddenly starts buying the same product, wearing the same shoes, or talking about the same trend, you might start wanting it too.
This is known as herd behaviour.
Sometimes this makes sense. If everyone suddenly starts running in the same direction, there might be a very good reason.
But sometimes popularity becomes its own justification:
“Everyone else wants it, so it must be valuable.”
This is part of what makes trends so powerful.
A good example is the rise of collectibles like Labubus. As more people bought them, posted them online, and resold them at high prices, even more people became interested. Popularity itself became evidence that the product was desirable.
The result can be a feedback loop:
More attention → more demand → higher perceived value → more attention.
The interesting part is that nobody necessarily has to be irrational individually. We are simply responding to the behaviour of everyone around us.
Why Do Losses Feel So Much Worse?
Another powerful bias is loss aversion.
Imagine I give you two choices:
A: You receive $100 for certain.
B: You have a 50% chance of receiving $200 and a 50% chance of receiving nothing.
Mathematically, both options have the same expected value: $100.
Yet many people prefer the guaranteed $100.
Now consider a different situation:
A: You lose $100 for certain.
B: You have a 50% chance of losing $200 and a 50% chance of losing nothing.
Suddenly, many people become much more willing to take the gamble.
The potential gain and loss are mathematically symmetrical, but they don’t feel symmetrical.
Psychologists call this loss aversion: losses tend to have a stronger psychological impact than equivalent gains.
This helps explain why we sometimes make decisions based more on avoiding regret than on maximising our actual outcome.
So Are Humans Just Irrational?
Not exactly.
It would be easy to read all of this and conclude that humans are simply terrible at making decisions.
But our biases probably exist for a reason.
Our brains evolved in environments where decisions often had to be made quickly and with incomplete information. Following the crowd could keep you safe. Avoiding losses could be more important than chasing uncertain rewards. Making quick assumptions could save valuable time.
These shortcuts aren’t necessarily mistakes.
The problem is that the world we live in today is very different from the environment in which many of these instincts developed.
Our brains might use the same shortcuts when deciding whether to run from danger and when deciding whether to buy something because everyone on social media has it.
The shortcut that helps in one situation can hurt us in another.
Can We Become More Rational?
Probably not completely.
There is no switch we can turn on that makes us immune to cognitive biases.
But understanding them gives us something valuable: the ability to question our own thinking.
Before making a decision, we can ask ourselves:
Am I continuing this because it’s genuinely worthwhile, or because I’ve already invested so much?
Am I looking for evidence, or just looking for evidence that proves me right?
Would I still want this if nobody else wanted it?
Am I making this decision because I expect a good outcome, or because I’m afraid of losing something?
These questions won’t make every decision perfect.
But they create a small gap between our first instinct and our final decision.
And sometimes, that gap is all we need.
Being smart doesn’t mean never making irrational decisions.
It means being curious enough to recognise that your own brain can sometimes fool you.