10 Quotes: Predictably Irrational

Dan Ariely got the inspiration to write Predictably Irrational while getting treatment from an injury that left 70% of his body left with third-degree burns. The frequent process of changing the bandages on his body meant that he had a lot of time to understand how his body handled pain. Why do some nurses take the bandages off slowly causing less pain but for longer? Why would some rip them off which would cause intense pain but for a shorter period of time? The psychology behind these questions compelled Dan to research into why humans will make irrational decisions and try and figure out if they are truly irrational. Here are my favorite 10 quotes from his work:

So what was going on here? Let me start with a fundamental observation: most people don’t know what they want unless they see it in context. We don’t know what kind of racing bike we want–until we see a champ in the Tour de France ratcheting the gears on a particular model. We don’t know what kind of speakers system we like–until we hear a set of speakers that sounds better than the previous one. We don’t even know what we want to do with our lives–until we find a relative or a friend who is doing just what we think we should be doing. Everything is relative, and that’s the point.

I think that the last part of this quote is especially powerful and a great way to start off this book. Everything is relative. Whats that even mean? It means that some people need gold to be happy, to others, hanging out with family means the world to them. Happiness is relative, success is relative, achievement is relative. What you choose to put yourself in context with will determine where you land, for better or for worse. 

We not only tend to compare things with one another but also tend to focus on comparing things that are easily comparable–and avoid comparing things that cannot be compared easily.

Say you’re at a bar, 3 girls (or guys) walk up to you. One attractive blonde, one less attractive blonde, and one attractive brunette. Dan tells us that our mind will always pick the attractive blonde but we can easily compare his/her level of attractiveness because we can put her into context (compared to the other blonde). Take this a step further, whenever you’re selling something, make sure that you can compare the product that you want to sell with one that is similar, but of lesser value. 

…we live simultaneously in two different worlds–cone where social norms prevail, and the other where market norms make the rules. The social norms include the friendly requests that people make of one another. Could you help me move this couch?…The second world, the one governed by market norms, is very different. There’s nothing warm and fuzzy about it. The exchanges are sharp-edged: wages, prices, rents, interest and costs-and-benefits. 

It was really interesting to read about these two different worlds. Dan constantly and eloquently explains feelings that I’ve wondered about for a while. You can feel these two worlds when you start doing favors for friends/family.

 What these results mean is that when price is not a part of the exchange, we become less selfish maximizers and start caring more about the welfare of others…As it turns out, we are caring social animals, but when the rules of the game involve money, this tendency is muted

What does this mean about charitable contributions and annual giving? Is it easier for an organization to ask people to donate non-monetary items? Is this why getting people do donate a $500 item for an auction is a lot easier then getting them to donate $500? Rhetorical question.

Second, unless we understand how we might react in an emotion state, we will not be able to predict this transformation, and thus sex education should focus less on the physiology and biology of the reproductive system, and more on strategies to deal with the emotions that accompany sexual arousal.

Basically, there is little point in describing the dangers of sex because everyone already knows them and yet still partake in unsafe practices. They do this because while your sexual sober, you’re not really thinking in the mindset of when you’re aroused. The two differ a lot….Don’t teach why something is bad, teach how to overcome the urges when you get in the situation. 

A hungry donkey approaches a barn one day looking for hay and discovers two haystacks of identical size at the two opposite sides of the barn. The donkey stands in the middle of the barn between the two haystacks, not knowing which to select. Hours go by, but he still can’t make up his mind. Unable to decide, the donkey eventually dies of starvation.

Once read a James Altucher quote in response to the question, “James I have so many ideas how to I know which one to pick which one to go with?” He responds with, “Try every idea, the right one will pick you.”

In general, two mechanisms shape the expectations that make placebos work. One is belief–our confidence or faith in the drug, the procedure, or the caregiver. Sometimes just the fact that a doctor or nurse is paying attention to us and reassuring us not only makes us feel better but also triggers our internal healing process….The second mechanism is conditioning. Like Pavlov’s famous dogs, the body builds up expectancy after repeated experiences and release carious chemicals to prepare us for the future. 

Branding, packaging, landing pages…they all look legit right?

Today, psychologists, economists and environmentalists use the phrase “the tragedy of the commons” to describe the same basic principle: when we use a common resources at a rate that is slower than the rate which it replenishes, all is well. However, if a few individuals get greedy and use more than their share, the system of consumption becomes unsustainable, and in the long term, everybody loses. 

Use all of the benefit, not have to deal with any of the costs.

…To this Smith added, “The success of most people … almost always depends upon the favor and good opinion of their neighbors and equals; and without a tolerably regular conduct these can very seldom be obtained. The good old proverb, therefore, that honesty is always the best policy, holds, in such situations, almost always perfectly true. 

If you’re not living an honest fun life…when what are you living?

When we look at the world around us, much of the dishonestly we see involved cheating that is one step removed from cash. Companies cheat with their accounting practices; executives cheat by using backdated stock options; lobbyists cheat by underwriting parties for politicians; drug companies cheat by sending doctors and their wives off on posh vacations. 

Dan is telling us that the lines get blurred when you’re not stealing cash. If you’re stealing something that is hard to put a cash value on then you’ll have less of a problem doing it.