Monday, August 22, 2011

1-minute read: The Upside of Irrationality, by Dan Ariely

I love psychology, but I hate pop psychology books. Distilled for the masses (the masses being the soft American middle: white, 45-year-old housewife somewhere in the Midwest), they’re 10 times longer than they need to be.

Everything is explained: Not just technical terms and study parameters, but every social phenomena. Like basketball. Basketball. Blink, The Paradox of Choice, Nudge, Predictably Irrational, and Stumbling on Happiness (thanks, Ant) all fall victim to this word vomit, though The Happiness Hypothesis does not.

The insights are important, though. That’s why I’ve taken the liberty to summarize The Upside of Irrationality, by Dan Ariely, so you don’t need to thumb through vaguely unsatisfying anecdotes to get to the meat.

If you really don’t have time, just read the one sentence “Takeaways.”

Note: in this review, really, really basic concepts, like loss aversion, are completely ignored.

Chapter 1: Paying More For Less

Incentives are a double edged sword. They motivate us, but promise too much, and performance declines. This doesn’t happen for simple mechanical tasks, but often for cognitive tasks. The reason? Incentives increase pressure; pressure sucks. How do we reap the merits of performance based pay without the associated pressure to perform? Ariely doesn’t say. Anecdotes: poor people in India and NBA players.

Takeaway: Don’t give a baby too much candy.

Chapter 2: The Meaning of Labor

In America, our jobs are intimately tied to our identity. Animals enjoy earning their food more than getting it for free (see rats, parrots). This goes against traditional economic theory. Similarly, people are motivated when they have an audience for their work, their work has personal meaning, and their work is appreciated. The industrial revolution – breaking tasks down to their component parts – creates efficiencies but exacts psychological damage. Who wants to sew the back pocket on Levis 12 hours a day? We don’t want to feel like a cog; we want to be the entire machine. Create (the perception of) meaningful work. Anecdote: Lego Sisyphus experiment.

Takeaway: Go kayaking, instead of lying on the beach.

Chapter 3: The IKEA effect

We want to feel ownership in what we do. Sara Lee created an empire because of her 70/30 rule:  automate 70% of cooking, let the cook do the other 30%. We treat our work as positively as we treat exemplars in the field, and we think other people love our work as much as we do. Making a process more difficult increases our love for it. Anecdotes: origami, building chairs.

Takeaway: Give people a little freedom, but not too much.

Chapter 4: The Not-Invented-Here Bias

People like their own ideas better than other people’s, even if it’s the same idea. People are addicted to their own ideas. Anecdote: word scramble for world problems, Thomas Edison, Sony.

Takeaway: Inception.

Chapter 5: The case for revenge:

The threat of vengeance has a certain efficacy. Punishing is pleasurable. When we’re mad, we don’t care who we punish. Saying “Sorry” negates much of the negativity, though. Anecdotes: ibankers; Audi; annoyed phone calls to people who will not give back your money; yours is a very bad hotel.

Takeaway: It’s too late to ‘pologize, it’s toooo lateeeee.

Chapter 6: On Adaptation

People who have experienced more pain can withstand more pain. If pain is associated with improvement, you are more resilient. We adapt to everything in life. To reap the benefits from our tendency to adapt, don’t take a break when doing negative things (paperwork), and take breaks when doing positive things (jacuzzi). Intermittently increase living standards to slowly level up adaptation to wealth. Select transient experiences because you can’t adapt as easily. Be reckless and do different things. Sources: The Joyless Economy.

Takeaway: Take breaks during sex.

Chapter 7: Hot or Not

A “sense of humor” is always code for “unattractive.” There are three ways to deal with being ugly: alter perception of aesthetics (“I like bald men”); reconsider the rank of attributes (“I value humor more than looks, anyway”); don’t adapt (“FML”). Ugliness does not change who we think is hot, but it changes our taste. (We view non-physical as more important.)

Takeaway: Throw a party where everyone writes a number on their foreheads, then try to bag the highest number in the room.

Chapter 8: When a Market Fails

The market for single people is the most egregious market failure in Western Society. People are like dining, perfume, and art – we are experience goods that have ineffable qualities. MIT students spend 12 hours online screening, and 1.8 hours going on real dates every week. Online dating should be called “Online searching and blurb writing.” Setting up a virtual world where people can meet is much more effective than skimming through profiles. Try to build a better dating site.

Takeaway: F*ck OKCupid.

Chapter 9: On Empathy and Emotion

The identifiable victim effect: “I am unable to multiply one man’s suffering by one million.” We help others based on 3 factors: proximity, vividness of encounter, and how much we uniquely can solve the problem. (We don’t want to be a “drop in the bucket.”) Empathy trumps rational thought.

Takeaway: Be wary of those street fundraisers.

Chapter 10: The Long Term effects on Short Term emotion

The snowball effect of negative emotion. A bad mood might cause you to lash out. But because we look at past actions to inform ourselves of who we are, a temporary bad mood might create an action that affects sequences of related decisions far into the future. Give yourself time to cool off before you act hastily.

Takeaway: Be happy.

Chapter 11: Lessons from our Irrationalities

We don’t like loss; we love the status quo; making irreversible decisions is hard; we can’t help but rationalize our choices. Psychological experiments are important.

Takeaway: Does it even matter?                                                                                                         


  1. Hahaha. I'm guessing a book like _Stumbling Upon Happiness_ would fall into the same category as _Blink_ and the others.

  2. I'm glad I'm not the only one who thinks these works are, at best, primers and does not actually impart very much useful information.

  3. yes! great call. I'm going to put stumbling in that list too.