Predictably Irrational

We recently read an interview with Dan Ariely, a professor at Duke University and author of Predictably Irrational. (He also maintains a blog here.)

Ariely’s personal story is worth relating briefly here… He suffered third degree burns on over 70% of his body after the explosion of a large magnesium flare. He was 18-years old at the time and had to suffer through years of rehabilitation.

“I felt partially separated from society and as a consequence started to observe the very activities that were once my daily routine as if I were an outsider,” he says. Talk about an absurd experience, though one that nobody would want to share…

Ariely’s research focuses on how we make decisions, with a particular emphasis on behavioral biases or effects we may not be aware of.

One of the ideas explored in the book have to do with the idea of ownership of things or ideas, which relates to our post yesterday, “more with less.”

Here is Ariely:

“The basic idea is that ownership changes our perspective, which applies to both material things as well as points of view. One principle involved is that the more work you put into something, the more ownership you begin to feel for it. For example, I can say from personal experience that pride of ownership is inversely proportional to the ease with which I’ve been able to assemble furniture. We have a term for that: the “Ikea effect.”

Once we take ownership of an idea – whether it’s related to politics or sports or investing – a lot of changes take place. We probably fall in love with the idea more than we should. We value it for more than it’s worth. And quite often, we have trouble letting go of it because we can’t stand the idea of its loss. What are you left with then? A rigid and unyielding ideology that can be quite detrimental to clear thought.”

So beyond absurd or other minimalist sensibilities, there are also scientific reasons validating how ownership of things (and, importantly, ideas) can weigh like chains on your thinking.

In the interview, he also relates a new project he is working on around the idea of alter ego:

“Our first idea is sort of an “alter-ego” application. If you are tempted to buy something, you choose some trusted friend or family member from your contact list and then are prompted to ask yourself, “What advice would this person give me?” You don’t actually ask the person at this point, but the goal is to force you to think with an outside perspective.

The second step is then to find out from that person what they actually would say. The first step causes you to reflect, which is important, and the second allows you to learn from others to inform longer-term decisions. We’re actually looking at lots of things that allow you to use your cell phone as a time buffer between your intentions and your actual behavior.”

The idea of asking what other people think is not particularly interesting or absurd, but the idea of looking at yourself and your actions with some distance is helpful and one we’ve talked about before on this blog. Again, it seems there is some scientific evidence supporting the idea that thinking with an outside perspective improves your decision-making.

We’ve not read Ariely’s book, which seeks to answer a variety of interesting questions… but if you have, post your comments here.