The Rational Illusion

Joao

Hey there, welcome back to The H2H Experiment. I’m Joao, your host—Brazilian by birth, Italian by address, and, honestly, a lifelong student of why we humans do the weird things we do. If you’re new here, this is the show where we get curious about the messy, unpredictable, and sometimes hilarious ways people actually behave—especially at work. Today, I want to dig into a question that’s been bugging me for years: Why do even the smartest people—like, the ones with all the degrees and corner offices—make decisions that, well, just don’t make sense? I mean, we’ve all seen it, right? The rational brain is supposed to be in charge, but somehow, we end up with baffling business choices, pricing that makes no sense, and meetings that go sideways. So, in this episode, we’re going to look at some real experiments, some sneaky pricing tricks, and the myth of the rational brain. And, of course, I’ll throw in a challenge for you—a little H2H Experiment to try out in your own world. Ready to see just how predictably irrational we all are? Let’s get into it.

Joao

Let’s start with a story that, honestly, changed the way I look at human behavior. Picture yourself in a hotel bathroom—fluffy towels, that little sign on the rack. You know the one: “Help us save the planet. Please reuse your towels.” Sounds logical, right? Appeals to your values, your sense of responsibility. But here’s the kicker: when researchers tested this, barely anyone changed their behavior. Most people just tossed their towels on the floor, business as usual. Then, they switched up the message. Same sign, same spot, but now it said, “75% of guests in this hotel reused their towels at least once during their stay.” Suddenly, compliance jumped by 26%. That’s huge! Why? It’s not about logic—it’s about what feels normal. This is what Richard Thaler, the guy who basically invented behavioral economics, calls a ‘nudge.’ We don’t respond to what’s true; we respond to what feels typical. If everyone else is doing it, we want to fit in. It’s not about being rational, it’s about not being the odd one out. And if you’re designing experiences—whether it’s for customers, employees, or anyone else—this is gold. Don’t just tell people what’s right. Show them what’s normal. That’s how you actually change behavior.

Joao

Now, let’s talk about money—because nothing brings out our irrational side quite like pricing, well, except for sex, but that´s not the focus of this episode. There’s this classic example from Dan Ariely, who wrote Predictably Irrational. The Economist magazine had three subscription options: online-only for $59, print-only for $125, and print plus online for… also $125. Wait, what? Why would anyone pick print-only when you can get both for the same price? Turns out, almost nobody did. But here’s the trick: when they offered just two options, most people picked the cheaper one. Add that useless middle option, and suddenly everyone’s going for the combo. It’s called the ‘decoy effect.’ We don’t know what things are worth in isolation—we need something to compare them to. So, when you’re setting up your own offers, think about how you’re framing the choices. Are you helping people make a decision, or just hoping they figure it out? Value isn’t fixed; it’s all about context. And sometimes, a little nudge—or a decoy—can make all the difference.

Joao

All right, time for our H2H Experiment of the Week. I want you to play detective in your own workplace. Your mission: catch one irrational moment. Look for a time when someone assumed logic would win, but human nature took over instead. Maybe it’s a customer ignoring a smart feature, a colleague skipping a useful tool, or a meeting that just devolved into politics instead of data. Ask yourself: What assumption was made? What behavior was ignored? What human truth was missed? Write it down. Reflect on it. And if you’re feeling brave, share your story with us on our social media, and maybe I’ll feature it in a future episode. The point isn’t to judge, it’s to notice. Because once you see these moments, you can start designing for them. That’s where the real magic happens.

Joao

Let’s shift gears to something I see all the time in organizations: overconfidence. A friend worked with a company that launched this big internal feedback platform—“Voices That Matter.” It had slick branding, personalized emails, and even a launch party with cake. But two months in, participation was flat. Leadership was baffled. “Our people are disengaged,” they said. But when they actually talked to employees, the story was different. They didn’t trust the system. They weren’t sure feedback was anonymous. And, honestly, they didn’t believe anything would change. That’s not resistance—that’s realism. But the leaders? They were stuck in confirmation bias. They only heard what matched their beliefs: the program was great, people were the problem. This is the danger of the rational illusion. We think we’re making logical decisions, but ego and emotion are always in the mix. And when logic meets ego, ego usually wins. If you want to avoid this trap, you’ve got to listen—really listen—to what people are telling you, even if it’s uncomfortable.

Joao

So, what do we do with all this? Do we just throw up our hands and accept that people are irrational? No way. The answer is to design for it. Human Experience—HX—isn’t about controlling people, it’s about compassion. It’s about building systems and cultures that work with human nature, not against it. That means replacing rigid steps with flexible paths, swapping assumptions for real listening, and trading perfection for curiosity. If most people aren’t logical, then logic alone isn’t enough. You need insight, empathy, and a willingness to meet people where they are. Your company doesn’t need more dashboards—it needs more truth. We’re not spreadsheets walking around. We’re stories, habits, impulses, and dreams. And if you can design for that, you’re already ahead of the game.

Joao

All right, let’s wrap this up. Today, we saw that humans are predictably irrational—whether it’s hotel towels, pricing tricks, or boardroom decisions. The rational brain is a myth, but that’s not a bad thing. It means we can understand, predict, and even design for the way people really are. Remember the H2H Experiment: spot one irrational moment at work, reflect on it, and maybe share it with us. That’s how we start to build better experiences—by seeing the world as it is, not as we wish it were. Thanks for joining me on this little safari through the cognitive jungle. If you got something out of this episode, share it, leave a review, or just nudge a friend to listen in. Also, check out our articles on LinkedIn and E.C.X.O., and our educational videos on YouTube. The future of work isn’t artificial—it’s deeply, deliciously human. And that’s the experiment we’re running here, together. Until next time, I’m Joao, and this was The H2H Experiment. Ciao for now!