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Is Irrational the New Rational?

Sep 15, 2009 In Design By Nishant Kothary

The idea that people make consistently logical choices has always befuddled me. Because honestly, it seems that evidence to the contrary is all around us.

Sway: The Irresistable Pull of Irrational Behavior Ori and Rom Brafman’s book Sway: The Irresistible Pull of Irrational Behavior, which I picked up a few weeks ago, confirms my thinking. By the time I reached the book’s halfway point, I had startling insights into previously unexplainable aspects of my personal and professional life: why some coworkers are so “emotional,” why a certain manager is illogical about one particular thing, why so many people hate Microsoft, & why my mother won’t ever take my advice about her diet.

Dan Ariely’s Predictably Irrational, which I am currently reading, is a meat & potatoes version of Sway. Ariely, a behavioral economist, gives insights into human nature that promise to change how you build products and behave within your organization.

Case studies and lab studies in both books reveal ways in which irrational behavior is,in fact,quite typical.

Groupthink

In one case, individual X was invited to participate in a study and taken into a room filled with other participants. What participant X didn’t know was that his fellow participants were paid actors.

The study began with a simple task: the lab instructor asked X to pick out the longest of three straight lines on a piece of paper (one line was unquestionably longer, so the answer was obvious). One by one, the paid actors answered out loud. And every time, much to X’s growing disdain and confusion, the actors picked the wrong line.

So what do you think X picked? Yep, you guessed it: he picked the same wrong answer that the actors gave. Despite knowing better.

Relative Thinking

In Predictably Irrational, Ariely talks about how humans tend to think relatively. He shows that we generally don’t know the intrinsic value of something; we only know its value in relation to something else. An example is purchasing a house. Choosing between a colonial and a craftsman, for instance, is very difficult because we have no basis for comparison. However, throw in a second colonial that’s slightly better than the first one (called the “decoy”) and we generally perceive the second colonial as superior not only to the first one, but also the craftsman.

Predicting Irrationality

Sounds crazy, but is it really so unusual? Haven’t we all been in a room where the vocal minority ends up swaying a vote at the last minute? Haven’t we all bought something we didn’t really want because we perceived the alternatives as inferior in comparison?

Natural marketers, salesmen and even pick-up artists have instinctually capitalized on our predictably irrational nature. Using a “decoy,” for example, is a classic tactic that many a lady friend of mine has confessed to using: when single women go out with the intention of meeting a guy in a pub, for example, they sometimes invite along another woman (“decoy”) who is comparable but slightly inferior to them in terms of attractiveness. Why? It helps convince potential mates of the “better” pick.

The New Emotional Design

Predictably Irrational The insights of behavioral economics are supremely important to most anyone who works with human beings, and especially those of us who work in fields with a “subjective” element (like design). These insights equip you with the background you need to understand and combat situations where smart people exhibit irrational behavior in a predictable manner (e.g. knee-jerk reactions in design review meetings from one or a set of individuals).

Predictably Irrational is a bible for any designer who works as a part of a bigger organization. I can comfortably say it’s the best “book on design” I’ve read in the past few years. Donald Norman‘s got nothing on Dan Ariely. OK, maybe I’m being hyperbolic, but seriously, go get the book. If it doesn’t change your thinking, I’ll buy you a drink.

Have you faced situations where you cock your head to the side wondering why everyone around you is acting slightly crazy? Have you read about behavioral economics? Is it your trade? We’d love to hear your thoughts on the topic. Feel free to follow us on twitter if you liked this post, and we’ll notify you of future ones.

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8 comments so far. You should leave one, too.

Jeff Putz said on Sep 15, 2009

Wow, how topical after last weekend''s display of idiocy in DC. I wrote a blog post today about how stupid people are being lately and calling it political activism. This puts things in a different context though. Perhaps it''s not that they''re being stupid... just irrational. Because everybody''s doing it!

Ian Muir said on Sep 15, 2009

I''ve run into this before.

A client was working with a host that charged an extra $10/month to use SQL Server. The client asked us to develop a site using XML files to store data to save money. When we pointed out that the extra dev costs would be equivalent to over a decade of $10/month charges, they still insisted that they would rather pay one upfront cost rather than "get nickel and dimed" by their host.

In the end, the XML-based system will pay for it self by 2055. As long as they don''t change their website.

Joshua Allen said on Sep 16, 2009

@Ian: That story is perfect! What a prime example to illustrate the point; I''ll be using your story in my own discussions now :-) Your example is real-world validation of two empirical studies I can recall off the top of my head: the "dollar auction" and the "point subtraction aggression paradigm". The studies on the latter were hilarious, in a tragic-but-funny sort of way.

Nishant Kothary said on Sep 16, 2009

@Jeff - What you''re talking about is a combination of ignorance and predictable irrational behavior in my opinion. I''m with you - I''m actually quite tired and frustrated of thinking that stupidity is the root cause. That doesn''t even add up especially since I know many of these "stupid" people very well (heck, I''m related to a few) and they seem perfectly rational (more so than me) otherwise. I definitely think the books will give you a completely different perspective. I wasn''t even aware of the field before "@allenjs":http://twitter.com/allenjs started talking about it in relation to the recent apocalyptic failure of our economy, but clearly, now I''m hooked. I''ve actually tried some techniques to sway people into decisions I need them to make at work, and it''s worked really well so far.

While I''ve heard some folks say negative things about "Sway", I recommend reading it first because it''s a very approachable and quick read. It whets your appetite just right. Would love to hear back if you end up reading either.

@Ian - That''s such a classic example! In terms of what the books explain, I believe it''s a combination of "loss aversion" and "chasing the loss" (search for those terms) that are at play in your XML example. So, I guess that we shouldn''t really complain if predictable irrationality provides job security as it did in your case.

Thomas Lewis said on Sep 16, 2009

@Nishant said: "I’ve actually tried some techniques to sway people into decisions I need them to make at work, and it’s worked really well so far."

Hmm, no wonder I have been more agreeable lately!

Nishant Kothary said on Sep 16, 2009

@TommyLee - You''re making an assumption that you''re irrational, my friend. Or, is this a confession? :p

Mike Swanson said on Sep 16, 2009

Great post, Nishant, and thanks for the book recommendations. The classic Rational Choice Theory (http://en.wikipedia.org/wiki/Rational_choice_theory) has been challenged more and more, especially given that it is the basis for so many models that didn''t help us predict or understand the recent economic failures. I''ll definitely check them out!

Nishant Kothary said on Sep 16, 2009

@Mike - Thanks. I wish I''d learned more about rational economic theory as a philosophy back in school when I took intro economics. That perspective would have helped when I was initially learning about micro/macro economics. A friend of mine just sent me a link to "Obamanomics":http://www.nytimes.com/2008/08/24/magazine/24Obamanomics-t.html?_r=2 on Facebook. Haven''t read through it yet, but I believe his philosophy incorporates behavioral economics into the classical model. Check it out, if you haven''t already.