Filling your shopping cart with enough bulk tortilla chips to supply a Frat house during Mardi Gras (AKA, the Costco syndrome).  Driving out of your way to get the $3.97/gal gas instead of $4.00/gal.  Spending right up to your credit limit when Victoria's Secret has that "Semi-Annual Blowout Sale" (ladies, you know what I'm talking about).

Does any of that really make sense?  If we were to evaluate our options more closely, we would likely conclude that while the bulk tortilla chips are only $10 for 10 bags we can only finish 4 bags, therefore wasting much of the $10, that the cost of fuel used to drive an extra 3 miles is more than the 3 cents per gallon you'd save (I did the math), and that - sale or not - you're still spending too much on underwear.

So how do we explain this overwhelmingly common irrational behavior?

Behavioral economists have dubbed the flawed reasoning behind those decisions as "predictably irrational" (also the title of a new book by Dan Ariely), and the result of invisible forces at work in people's brains, like emotions, expectations and social norms. 

Humans rarely choose things in absolute terms. We don’t have an internal value meter that tells us how much things are worth. Rather, we focus on the relative advantage of one thing over another, and estimate value accordingly. (For instance, I don’t know the value of 5 lbs of tortilla chips, so I may assume it's worth 10 times the value of 1/2 lb to myself - which the principle of marginal benefit would certainly tell us is not the case.)

So does being aware of the traps of predictably irrational behavior help us to act more... well, rationally?  I can't say that it does (as evidenced by my cupboards overflowing with sale bags of soy chips - [ir]rationalization: if I choose soy over tortilla chips I "save" 20 calories per serving... and end up polishing off the whole bag - and dresser crammed full of unmentionables.

But as someone working in the marketing profession, I suppose I should be thankful for that.  Behavior economics is, after all, the founding principle of the industry.