Tag: Dan Ariely

Choice is Complicated

Posted on by SGA SGA

When I go to a restaurant, I like to order a-la-carte. Unless it’s a killer package deal, I prefer to get the appetizer, main dish and dessert of my choice for a three-course meal. Unlike me, my mom and her friends like to get prix fixe meals where all the thinking has been done for them.

Everyone has different tolerance levels for choice. I bet chefs sometimes wonder if choice should be given to those asking for their steak well done. Or check out this funny story about how the Japanese feel about a woman’s choice to drink green tea with sugar.

Choice has always been held high up as a veritable human right and part of the virtues of freedom. But is it?

The market seems to believe the more choices the merrier (consumers want their 40+ kinds of near-identical bottled water, coffee, toothpaste, etc). Then we learned that too much choice is paralyzing (the famed jam study). But wait, it’s not that choice alone is bad, it’s that what we really want is limited choices (Malcolm Gladwell makes the case around spaghetti sauces).

At the end of the day, however, we irrational human beings usually regret the choice we make and immediately think we could have made a better choice.

So what are we to do? What choice do we have?

Here are some surprising findings around our so-called freedom to choose. In fact, research has shown that we are not as free in choosing as we think.

  • Anchored: once we have set a price for something, we are swayed by that anchor independent of the choices’ merits or pitfalls, as seen in this research paper
  • Not a copycat: we have strong impulses to be unique, even if doing so goes against our real preferences, as seen in this case study on beer ordering
  • Decoy: setting up an unlikely but present choice helps to sway us to a more likeable choice, as seen in many restaurant menus that have a $45 steak item that makes everything look super cheap

The bottom line is that choice isn’t good or bad and is in fact a lot more complex in its cultural and irrational layers.

4 Reasons We Lie, Cheat and Steal

Posted on by SGA SGA

 

Let’s cut to the chase. We all lie. It’s one of those dirty little secrets every human being carries around. Sure, there are different degrees of it. Bernie Madoff’s deception isn’t really in the same league as telling your girlfriend that you like her DIY dye job. But they’re both lies.

Why we lie is the ongoing fascination of Dan Ariely, a professor of psychology and behavioral economics at Duke University. His most recent book, The (Honest) Truth About Dishonesty reveals some interesting stuff about what prompts us to lie, cheat and steal—and how we can curb that inclination.

First, let’s clear something up. Once upon a time, a very smart Nobel Prize-winning economist named Gary Becker came up with this theory that given the opportunity to knock off a convenience store, we’d make a quick cost-benefit analysis to decide if it’s a good idea. In other words, we’d weigh how much we have to gain from the register against the likelihood of being caught and the punishment we’d receive if we did.

But it turns out humans aren’t that rational. Through a series of experiments, Ariely found that neither money nor the likelihood of being caught had any real influence on whether we cheat. So why do we?

1. The lie doesn’t tarnish our positive self-image. Over and over, Ariely found that most people cheat just a little. We seek benefit, so we’ll shave a couple of swings off our golf game or pocket an extra dollar or two. But we also want to see ourselves as a good person, so we’ll take only a smidge so we can still look ourselves in the mirror.

2. We see a difference between money and goods. In one experiment, test takers were paid for all self-reported correct answers in either cash or tokens that could be redeemed for cash. People lied for tokens twice as much as people who lied for cash. I guess we know why there’s never a pen in the bulk-food section of the grocery store.

3. Cheating is infectious. But whether you catch it depends on who is cheating. When we witness someone in our own social group (a friend, sibling or colleague) cheat, we think cheating is more socially acceptable and we’re more likely to join in. On the flip side, if we notice an outsider cheating, we actually become more honest in order to distance ourselves from the lying, no-good thief.

4. Blame knock-off handbags. Ariely found that when people knowingly wear counterfeit products, they loosen their moral code, making it easier to be more dishonest. Yikes! That fake Louis Vuitton cost a bit more than you thought.