by Dan Ariely
FIRST EDITION
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*Readers of Predictably Irrational with a particularly good memory may recall part of this story.
*If you think that you never sacrifice long-term benefits for short-term satisfaction, just ask your significant other or your friends. No doubt they can point out an example or two for you.
*Sometimes experiments reveal surprising, counterintuitive findings; at other times, they confirm intuitions most of us already have. But intuition is not the same as evidence; and only by conducting careful experimentation can we discover whether our hunches about a certain human foible are right or wrong.
*References to the academic papers mentioned in each chapter, as well as suggested additional readings, are at the end of the book.
*There have, of course, been many attempts to explain why it is rational to pay CEOs very high salaries, including one that I find particularly interesting but unlikely. According to this theory, executives get very high pay not because anyone thinks they earned it or deserve it but because paying them so much can motivate other people to work hard in the hope that they too will one day be overpaid like the CEO. The funny thing about this theory is that if you follow it to its logical conclusion, you would not only pay CEOs ridiculously high salaries, but you would also force them to spend more time with their friends and families and send them on expensive vacations in order to complete the picture of a perfect life—because this would be the best way to motivate other people to try to become CEOs.
*Each participant played in a different, random order. The order of the games did not make a difference in terms of performance.
*Loss aversion is a powerful idea that was introduced by Danny Kahneman and Amos Tversky, and it has been applied to many domains. For this line of work, Danny received the 2002 Nobel Prize in Economics (sadly, Amos had already passed away in 1996).
*I suspect that economists who fully believe in the rationality of businesses have never worked a day outside academia.
*In defense of those who place too much confidence in their intuition, the payment-to-performance link is not easy to figure out or study.
*The answers are HOUSE, AUDIT, and ANAGRAM. For fun, try this one (with the added constraint that switching the letters around should maintain the general meaning): OLD WEST ACTION: __________________.
*When academics finish a paper, we submit it to a journal, at which point the editor sends it to a few anonymous reviewers to pass critical judgment and tell the authors why the paper is useless and should never be published. It is one of the tortures we academics inflict on ourselves and, in my opinion, it is one of the main barriers to finding meaning in an academic career.
*Nowadays they take older, more mature individuals as guards for these trips.
*As a parent, I am sure there is some clue here about how to get kids to eat, but I am not sure what it is yet.
*•I do the same thing as Jean Paul when I experiment with cooking. The food I make, objectively speaking, is not as good as the food I could get in restaurants, but I do find it more meaningful and pleasurable.
*The neocortex is the most recent part of the brain to evolve and one of the most substantial differences between the human brain and those of all other mammals.
*Although I do remember one time when she asked me whether she could listen to me practice a talk about subjective and objective probabilities and I was quite disheartened when, ten minutes into it, she fell asleep.
*I suspect that the “duck test” (if it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck) is the best way to define meaning at work. Moreover, the important aspect of our experiments is the difference in meaning between the conditions and not the absolute level of meaning.
*In general, we are often overly focused on endings when we evaluate overall experiences. From this perspective, a cake at the end of a meal is of particular importance.
*• The same principle would also apply to men. I am using female terms because at the time, women were more likely to be in charge of cooking.
*As discussed in chapter 2, “The Meaning of Labor,” even animals prefer to eat food that they have worked for in one way or another.
*The Becker-DeGroot-Marschak procedure is similar to a second-price auction played against a random distribution.
*For some of the dangers of customization and the risks of overfalling in love with our own creations, see my story of overtailoring my house in Predictably Irrational.
*The differences between the two types of auctions are somewhat complex—which is why William Vickrey was awarded the Nobel Prize in Economics in 1996 for describing some of their nuances.
*This procedure is similar to the auction method used by eBay, as well as the Becker-DeGroot-Marschak method we used earlier.
*The problems were given to them in a randomly determined order.
*There are a few exceptions to the rule; some companies seem to be very good in adopting external ideas and moving forward with them in a big way. For example, Apple took many ideas from Xerox PARC, and Microsoft borrowed ideas from Apple.
*In fact, revenge is a good metaphor for behavioral economics more generally. Though the instinct may not be rational, it is not senseless, and sometimes it is even useful.
*There are many different versions of this game, with different rules and different amounts of money, but the basic principle is the same.
*The bailout did help many banks, which quickly returned to profitability and proceeded to pass out large bonuses to their top management. It didn’t do as much for the economy.
*The nickname for a law that provides a remedy for purchasers of new cars that fail to meet certain standards of quality and performance (lemons).
*This is another example of strong revenge, since the Neistat brothers broke some laws regarding the destruction of property when they defaced the iPod posters.
*Pain is an experience that is influenced by both physical and hedonic components and as such it is a useful bridge between physical adaptation (e.g., a frog getting used to increasingly hot water) and hedonic adaptation (e.g., a person getting desensitized to the smell of his or her new car).
*For more on this, see Daniel Gilbert’s book Stumbling on Happiness.
*For an exception, see San Francisco.
*Speaking of interruptions, think about television. We spend all kinds of money on gadgets and services such as TiVo to keep commercials out of our lives. But could we possibly enjoy the latest installment of Lost or House even more with the periodic interruptions of commercials? Leif, Tom, and Jeff Galak had the gall to test this. They discovered that when people are watching uninterru
pted TV programs, their pleasure diminishes as the show goes on. But when the show is interrupted by commercial breaks, the pleasure level increases. I have to admit that, in spite of these findings, I will continue to use my TiVo.
*The Jobst was a head-to-toe plastic cover designed to put pressure on the recovering tissue. It covered me completely, leaving holes only for my eyes, ears, and mouth. It made me look like a cross between a flesh-colored Spider-Man and a bank robber.
*I often had a strong feeling that when others observed me, they saw my injury but also inferred that my appearance was correlated with diminished intelligence. As a consequence, it was very important to me to demonstrate that my mind still functioned in the same way it had before my accident.
*In reality, the correlation between wine price and quality is close to zero, but that’s an issue for another day.
*Other stories depicting humans imprisoned within their bodies include Ovid’s Metamorphoses, “The Beauty and the Beast,” Johnny Got His Gun, and The Diving Bell and the Butterfly, to name a few.
*When I use the term “aesthetically challenged,” it is because I don’t know what term to use. All I mean is that some people are more physically attractive and others are less so.
*If you’ve never been to www.hotornot.com, I highly recommend that you check it out, if only for the glimpse it provides into human psychology.
*Given the nature of HOT or NOT, our data most likely overemphasized beauty relative to other attributes. Nevertheless, the principles we examined should generalize to other types of adaptation as well.
*We did not include people searching for same-sex partners in this first step, but that could be an interesting extension of the research.
*Michelle will likely shave off a few years and pounds, of course. People often tend to fudge their numbers in online dating—virtual men are taller and richer, while virtual women are thinner and younger than their real-life counterparts.
*If you feel like trying this for yourself, ask a few of your acquaintances to describe themselves using the methods of online dating (without giving information that will identify who they are). Then see if you can tell, from their profiles, whom you actually like and whom you can’t stand.
*This thought experiment is based on one of Peter Singer’s examples in Famine, Affluence, and Morality (1972). His recent book The Life You Can Save further develops this argument.
*Though I describe these three factors (closeness, vividness, and the drop-in-the-bucket effect) as separate, in real life they often work in combination and it is not always clear which one is the main driving force.
*This is not to say that there are not many wonderful people who give money and volunteer their time to help strangers on the opposite side of the globe, only that the tendency to do so depends on closeness, vividness, and the drop-in-the-bucket effect.
*Like many political bodies, the United Nations is anemic and spineless. It hardly helps that the five permanent members of the Security Council have veto power over virtually every important UN decision. But, in principle, the United Nations could potentially be a force that solves important problems even when the public’s emotions are not ignited.
*For other ways in which self-herding influences us, see chapter 2 in Predictably Irrational.
*I have not done the needed research to validate my canoeing test, so I can’t say for sure, but I suspect that it would have an excellent predictive accuracy (and yes, I am perfectly aware of the overconfidence bias).
*In experiments I conducted many years later with athletes, I found that counting helps increase endurance and that counting backward is even more helpful.
*This is not to say that medical professionals have not discovered wonderful treatments over the years; they have. The point is that without sufficient experimentation, they keep on using ineffective or dangerous treatments for too long.
*For two great books on medical delusions, see Nortin Hadler’s Stabbed in the Back and Worried Sick.
*As for the question of whether men or women have a higher pain threshold and whether this is somehow connected to childbirth—this is still an open question.
*For more on the importance of social life for health, see Ellen Langer’s book Counterclockwise.
