Interview with Predictably Irrational's Dan Ariely -- the Power of a T-Shirt Slogan

Francois Gossieaux of Beeline Labs interviewed Duke University economist Dan Ariely, author of Predictably Irrational for the CMO 2.0 podcast. You can listen to it here.

The entire interview is interesting, but here are two anecdotes that stood out:

1. In one experiment, Ariely gave a group of volunteers t-shirts with the word "generous" printed on them and gave another group shirts that said "stingy." It turned out the the people behaved according to the word on the shirts they were given, even when the word was printed inside the shirt so that no one else could see it. (Maybe we should all start wearing shirts that say "happy" on them.)

2. Ariely told the story of a day care center in Israel that was having a problem with parents picking up their kids after closing time. The school tried to put an end to this by fining late parents $15 an hour. But the plan backfired, because the parents no longer felt guilty about keeping their kids late -- the money they paid the school to keep their kids after closing time turned their inconsiderate and guilt-inducing behavior into an acceptable business transaction. So the school -- which was primarily interested in making sure parents weren't late, not in making extra money --  dropped the fines, and reverted to its original policy. Unfortunately, instead of re-introducing guilt into the equation, the school had simply conditioned parents to keep their kids at school after it closed, free of both guilt and financial costs.

The lessons to be learned from Ariely's anecdotes is that the we make financial decisions based on connections to our evolutionary roots as social animals, and that we behave in ways that are often difficult for us to understand. By studying examples of behavioral economics like these, we can learn to recognize instances of our own financial irrationality and hopefully do something about it.

Mark Frauenfelder – Editor-in-chief of MAKE magazine and the founder of the popular Boing Boing weblog, Mark was an editor at Wired from 1993-1998 and is the founding editor of Wired Online.

Comments

[Bill]

Yeah, I could have recounted the Israeli daycare center story from the book Freakonomics, too. Very original.