Does irrationality have an upside?
One of my favorite books of recent years was Predictably Irrational by Duke behavioral economist Dan Ariely. Now Ariely is back with a new book, The Upside of Irrationality, and it’s just as good and, in some ways, even better.
Where the last book focused on how poor reasoning can lead us astray, this one explores dozens of cool experiments that offer some guidance on using our irrational tendencies for our benefit at work and at home. Ariely also threads the book with his own story — especially his experience being severely burned in an explosion as a young man — which gives this book a more personal feel than its predecessor.
Here are five insights (mostly in Ariely’s own words) that I’ve found particularly compelling and that I’ve been badgering people with the last few days.
1. Bonuses can impair performance. “Paying people high bonuses can result in high performance when it comes to simple mechanical tasks, but the opposite can happen when you ask them to use their brains.” (Careful readers will note that I wrote about one of Ariely’s experiments on this front in Drive.) “[T]hough a large amount of money would most likely get you to work many hours (which is why high payment is very useful as an incentive when simple mechanical tasks are involved), it is unlikely to improve your creativity.”
2. Seeing the fruits of our labor is inherently motivating. In an experiment where people who loved Legos were paid to create Lego figures, having their creation disassembled before their eyes dramatically reduced their interest and their persistence. “[I]f you take people who love something . . . and you place them in meaningful work conditions, the joy they derive from the activity is going to be a major driver in dictating their level of effort. However, if you take the same people with the same initial passion and desire and place them in meaningless working conditions, you can very easily kill any internal joy they might derive from the activity.”
3. We overvalue what we make ourselves. Airely calls this the “IKEA effect.” But this irrational valuing can actually help us. “[T]o increase your feelings of pride and ownership in your daily life, you should take a larger part in creating more of the things you use in your daily life.”
4. We adapt to new conditions — both good and bad — remarkably quickly. This leads to a piece of counterintuitive advice. “You may think that taking a break during an irritating or boring experience will be good for you, but a break actually decreases your ability to adapt, making the experience seem worse when you have to return to it.” Likewise, it’s helpful to “slow down pleasure” and actually interrupt or space out pleasurable experiences so you don’t adapt to them too quickly.
5. Acting on our negative feelings can be dangerous — even in the long run. “[I]f we do nothing while we are feeling an emotion, there is no short-term or long-term harm that can come to us.” However, if we make a decision based on that emotion, “we may not only regret the immediate outcome, but we may create a long-lasting pattern of [decisions] that will continue to misguide us for a long time.”
That’s just a taste. Read the whole book. (You can buy it here, here, or here.) It will be one of the most rational decisions you make this summer.
Professor March of Stanford gave classes on the evolutionary advantages of being stupid. He modeled situations as stochastic processes. Consider a boy and a girl wanting to go to a movie together, where the boy wants one film and the girl another. If the girl is smarter, she will probably realize that the real issue is going together without an argument and go to the boy’s choice. Stupid boy wins. Scenarios like this occur frequently; especially in public politics.
Loved Dan Ariely’s “Predictably Irrational” and look forward to reading his latest. From the take-aways you noted, looks like you two Dans are kindred spirits. Thanks to you both for deciphering what makes us tick! k
#5? “Acting on our negative feelings can dangerous — even in the long run.” Sorry, is there supposed to be a ‘be’ in that sentence?
@Hope –Thanks for catching that. All fixed now.
#3 ” We overvalue what we make ourselves.” I’m not understanding number #3? Shouldn’t it be ‘we undervalue what we make ourselves?”
@Hope — Nope. That one is right. When we make something ourselves, we consider more valuable than it really is and believe others share the view. Ariely has a great explanation of this phenomenon using an in experiment in which people created — get this — origami frogs.
Thanks for summarizing. I have been so intrigued by Dan’s ideas ever since I saw him speak at SXSW in March and am reading his latest book on my iPad. I also listen to his podcasts “Arming the Donkeys” on my ride to work daily. The convergence of behavioral economics and social media is magical. I believe they work hand in hand and always keep Dan’s ideas in the back of my mind when designing campaigns for clients.
Indeed, his chapters about motivation kind of reminded me of Drive.
But what really caught me here was how personal this book is. This makes you feel almost like a close friend of him.
Best regards from Brazil,
Rodolfo.
Re: #3, I guess that’s a caution for us to be aware that others may not value something we make as much as we do, leading to a couple of thoughts: be aware of what your making and why; and, be aware that someone else who makes something and brings it to you (a friend, a child, and employee) probably places higher value on it than you might…while we may be conditioned to value our child’s creation (see the refrigerator door), we may have to work at it a bit to acknowledge others’efforts.
Bought the signed hard copy when it launched. Will get to it after John Jantsch’s Referral Engine. Good plug! Perhaps I should call him to do a digital book signing in Des Moines?? 😉
As an educator, I am glad to see more best-selling books tackle the zombie of performance pay. Race to the Top gets everything wrong according to the latest research and wisdom. Money is the wrong incentive, more government oversight reduces autonomy, and teaching to the test robs teachers of purpose. Mastery isn’t achieved by threatening to fire teachers who don’t produce on standardized tests – it’s achieved by hiring and retaining the right people and supporting them throughout their career.
The SWAY: Irresitable Pull of Irrational Behavior is a great read. Full of scenarios that give you “cause to pause”, especially the air plane accident in the Canary Islands years ago.
Is there any chance someone will solve a problem listed by claymath if he starts working on it after he hears of it in claymath ? Claymath listed unsolved questions which are highly complex and tagged each one with a money prize.
I can’t wait to read this book. It sounds phenomenal. Thank you for this post.