Dan Ariely
Dishonesty is all about the small acts we can take and then think, 'No, this not real cheating.' So if you think that the main mechanism is rationalization, then what you come up with, and that's what we find, is that we're basically trying to balance feeling good about ourselves.
Because cheating is easier when we can justify our behavior, people often cheat in small amounts: We can come up with an excuse for stealing Post-It notes, but it is much more difficult to come up with an excuse for taking $10,000 from petty cash.
The experiments show quite clearly that, as you resist more and more temptation, you're actually more and more likely to fail.
While we somehow understand revenge on an intuitive level between individuals, I do suspect that companies, assuming that people are rational, completely miss and underestimate the motivation people have for revenge.
In a world where everyone is behaving honestly, any dishonesty constitutes a big infraction. But, in a world where many people are behaving dishonestly, and the news is filled with stories of their infractions, even big infractions can feel small to the perpetrator.
Even the most analytical thinkers are predictably irrational; the really smart ones acknowledge and address their irrationalities.
We talk about honesty, but the reality is we have lots of human values, and they are not all compatible. We don't always tell the truth about everything, no matter what the consequences.
It is helpful to think of people as having two fundamental motivations: the desire to see ourselves as honest, good people, and the desire to gain the benefits that come from cheating - on our taxes or on the football field.
Honesty is a complex and tricky thing, and we don't want to be honest all the time.
What kind of people would be able to rationalize better than other people? Better storytellers, right? Creative people, right? Because if you're creative, you find more ways to cheat and still yourself a story about why this is okay.
In terms of the actual curriculum for management education, my own view is very simple-minded: The world is incredibly complex, it changes all the time, and we should not even hope that we could create a general model that accurately describes the world in all its possible states.
We should teach the students, as well as executives, how to conduct experiments, how to examine data, and how to use these tools to make better decisions.
Disasters are usually a good time to re-examine what we've done so far, what mistakes we've made, and what improvements should come next.
It is true that from a behavioral economics perspective we are fallible, easily confused, not that smart, and often irrational. We are more like Homer Simpson than Superman. So from this perspective it is rather depressing. But at the same time there is also a silver lining. There are free lunches!
I always found the appeal to the market gods a bit odd. Why would the market fix mistakes instead of aggravating them?
Big Data is like teenage sex: everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.Collection: Witty
that when given the opportunity, many honest people will cheat.Collection: Opportunity
One of the big lessons from behavioral economics is that we make decisions as a function of the environment that we're in.Collection: Decision
We are all far less rational in our decision-making than standard economic theory assumes. Our irrational behaviors are neither random nor senseless: they are systematic and predictable. We all make the same types of mistakes over and over, because of the basic wiring of our brains.Collection: Mistake
The more cashless our society becomes, the more our moral compass slips.Collection: Our Society
Money is all about opportunity cost. Every time you spend on something, that's something you can't spend on something else.Collection: Opportunity
People are irrational - and predictably so.Collection: People
The idea that you will make the right decision every time is very unlikely.Collection: Ideas
We all want explanations for why we behave as we do and for the ways the world around us functions. Even when our feeble explanations have little to do with reality. We’re storytelling creatures by nature, and we tell ourselves story after story until we come up with an explanation that we like and that sounds reasonable enough to believe. And when the story portrays us in a more glowing and positive light, so much the better.Collection: Believe
With everything you do, in fact, you should train yourself to question your repeated behaviors.Collection: Facts
The things that motivate us are to help other people, to feel that we're useful, to feel that we're getting better, to feel that we are kind of living to our potential, to get a sense of meaning. All of those things are positive.Collection: Helping Others
Thinking is difficult and sometimes unpleasant.Collection: Thinking
The major thing that holds you back when you're trying to change a bad habit like eating, smoking, or drinking too much is your belief you are out of control.Collection: Drinking
Ownership is not limited to material things. It can also apply to points of view. Once we take ownership of an idea - whether it’s about politics or sports - what do we do? We love it perhaps more than we should. We prize it more than it is worth. And most frequently, we have trouble letting go of it because we can’t stand the idea of its loss. What are we left with then? An ideology - rigid and unyielding.Collection: Sports
Marketing is all about providing information that will heighten someone's anticipated and real pleasure.Collection: Real
When parents have college savings accounts for their kids, their kids show higher social and cognitive performance.Collection: Kids
One percent of people will always be honest and never steal," the locksmith said. "Another one percent will always be dishonest and always try to pick your lock and steal your television. And the rest will be honest as long as the conditions are right - but if they are tempted enough, they'll be dishonest too. Locks won't protect you from the thieves, who can get in your house if they really want to. They will only protect you from the mostly honest people who might be tempted to try your door if it had no lock".Collection: Doors
Brands communicate in two directions: they help us tell other people something about ourselves, but they also help us form ideas about who we are.Collection: Ideas
Giving up on our long-term goals for immediate gratification, my friends, is procrastination.Collection: Giving Up
Your immediate environment is comprised of coffee shops, supermarkets, websites, apps and all kinds of things - none of which have an interest in your long-term or short-term financial well-being.Collection: Coffee
If you get people to feel that they are putting something, that they are creating it and so on, their love for the project would increase. The more something is yours, the more you're willing to invest in it.Collection: People
Scaling down individually is very hard. Imagine that if you go to a place where everybody is dressed nicely, and you are the only one who doesn't dress nicely. Everybody goes on vacations to a great place and you go to the Jersey shore. It's very hard to do these things without an organized mechanism, but it looks to me like there might be some organized mechanisms.Collection: Vacation
But suppose we are nothing more than the sum of our first, naive, random behaviors. What then?Collection: Firsts
We have very strong intuitions about all kinds of things — our own ability, how the economy works, how we should pay school teachers. But unless we start testing those intuitions, we’re not going to do better.Collection: Teacher
I don't know what exactly the translation is but when we do consume something now, something else has to give at some point.Collection: Giving
If you want to spend more money in restaurants, use credit cards more than cash. If you want to spend less, use cash more than credit cards. But in general, we can think about how to use the pain of paying and how much of it do we want. And I think we have like a range. Credit cards have very little pain of paying, debit cards have a little bit more because you feel like today, at least it is coming out of your checking account, and cash has much more.Collection: Pain
The people that lend you money basically give you an answer based on the risk that they are willing to take. But just because a bank is willing to take a particular risk doesn't mean that that is the right amount for me to spend.Collection: Mean
For all of us, it's very hard to think about money, and because of that, we need help. In the same way that for all of us, it is hard to eat well, and we need some help. The poor have a particular challenge, which is that their life is actually much more complex - and they're much more complex cognitively.Collection: Thinking
I don't think we should go around life and being miserable all the time and feel the pain of paying. It's a question of what categories we want to spend more on and what categories we want feel that we are spending too much on and we want to cut down.Collection: Pain
What you should do is wait until the end of each month, and then say, "OK, how much money do I have? How much do I need? Let me send the rest to retirement."Collection: Retirement
In the U.S., I think there is an ideology of not telling kids what to do. Nobody to tell you who to marry, not tell you what job to pick. You're your own person. You have the freedom to choose, including the freedom to fail in magnificent ways. And I think that's the big difference. In other countries there is basically a social norm about saving that is passed from generation to generation. In the U.S. there isn't.Collection: Country
That’s a lesson we can all learn: the more we have, the more we want. And the only cure is to break the cycle of relativity.Collection: Lessons
If you ever go bar hopping, who do you want to take with you? You want a slightly uglier version of yourself. Similar ... but slightly uglier.Collection: Motivation
Who would you trust right now? Which bank would you trust? Which investment would you trust? Do you really want to put your money; do you want to suffer more of these losses that we just had? You know, these volatility that we see is just unexplainable by any rational standards. Nobody has any clue about how to explain this, and nobody wants to experience that. So, we hold more money back, we don't necessarily want to invest in the market and by default, people are saving more.Collection: Loss
The problem with opportunity cost is that opportunity cost is divided among many, many things.Collection: Opportunity