In any given situation, you carefully consider the available data, rigorously evaluating it against scientific principles.

Because you can't be an expert in every field, you make judgements based on the credibility of people who you believe to be qualified.

If they are scientists - or anybody from a reputable field of research - you know that their work has been extensively reviewed by their peers and, although mistakes still get through, you accept this is the most reliable approach.

And, when faced with sufficient evidence, you change your opinions.

Or maybe not, because logic is the thing that nature gives us to justify our emotions.

A difficulty is that you don't have (and surely don't want) expert advice for every choice you make. That leads to innumerable, shall we say, suboptimal, decisions on a daily basis.

Marketers have long known this, using many subtle tricks to exploit our fallibility and induce us to spend more than we need, or buy things we don't need at all.

One device from the field of behavioural economics is called "price anchoring", which is truly bizarre when you think about it.

Dan Ariely in his book Predictably Irrational describes how the first number mentioned sets the baseline for the attitude to price.

In one experiment, they showed subjects a social security number. Those who saw a higher number were prepared to pay more for the product (a trivial item used for the study).

In a funeral parlour, the operators place their premium brand where their customers would view it first. That anchored expectations, which meant customers spent significantly more than they otherwise would.

Another trick is the Decoy, in which the mid-sized product is marginally cheaper than the large, while the small is much cheaper.

Customers tend to buy the overpriced large product (buckets of popcorn in the experiments) simply because, at a glance, it looks like better value. However it's a worse deal than if they bought the small bucket.

While these experiments are for relatively minor products, the message is profound. Traditional economics assumes rational behaviour, which is clearly not true. People frequently make choices that are not in their best interest.

This has implications for policy makers when, for example, they rely solely on using the law to combat crime.

There are myriad laws to control every aspect of human behaviour and yet people break the law every day. Threats of fines or even imprisonment are only a partial solution.

Continually ramping up penalties may or may not have any effect. The "tough on crime" approach is simplistic at best, and possibly damaging if the surrounding circumstances such as the social environment are ignored.

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