Top 109 Quotes & Sayings by Dan Ariely
Explore popular quotes and sayings by an Israeli economist Dan Ariely.
Last updated on November 25, 2024.
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.
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.
Even the most analytical thinkers are predictably irrational; the really smart ones acknowledge and address their irrationalities.
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.
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.
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.
Honesty is a complex and tricky thing, and we don't want to be honest all the time.
I always found the appeal to the market gods a bit odd. Why would the market fix mistakes instead of aggravating them?
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.
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!
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.
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.
The experiments show quite clearly that, as you resist more and more temptation, you're actually more and more likely to fail.
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.
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.
When we think about labor, we usually think about motivation and payment as the same thing, but the reality is that we should probably add all kinds of things to it - meaning, creation, challenges, ownership, identity, pride, etc.
Companies, however
unintentionally, choke the motivation out of their employees.
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.
When you're in pain, tomorrow doesn't exist - just the pain - and the only thing that you want in the world is for it to go away.
The most difficult thing is to recognize that sometimes we too are blinded by our own incentives. Because we don’t see how our conflicts of interest work on us.
One of the big lessons from behavioral economics is that we make decisions as a function of the environment that we're in.
Not all debt is bad. From time to time we should get into debt when there's a good reason for that.
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.
What reminds you in your environment about saving? Nothing.
We don't really want a huge house, but we want the house to be slightly bigger than our neighbors, and a car that is bigger than our neighbor's, and they're going on vacation that's slightly more expensive, and this escalation happens that things got out of hand.
If we all make systematic mistakes in our decisions, then why not develop new strategies, tools, and methods to help us make better decisions and improve our overall well-being? That's exactly the meaning of free lunches- the idea that there are tools, methods, and policies that can help all of us make better decisions and as a consequence achieve what we desire-pg. 241
Marketing is all about providing information that will heighten someone's anticipated and real pleasure.
Rainy day savings are incredibly important, because from time to time, bad things happen. And if you're not prepared for that, it's going to be really terrible.
You can think about life as a battle between you and a doughnut shop. The doughnut shop wants you to eat another doughnut and pay the money, and you want to do it in the short term, but in the long term it's not good for you either financially or from a health perspective.
Interesting thing that is happening in American society is that people are starting to talk about money. I don't know how you feel about this, but for a long time, nobody was talking about money. It was a secret. And it's kind of very interesting because we do lots of stuff to portray to people about how much money we have, the clothes we wear and the cars we have and the house - they all kind of depict to other people, signal how much money we make, but we don't talk about it specifically.
Imagine you owe on five credit cards, you owe five debts. So which debt should you pay first? And the answer is very simple: You should pay the one with the highest interest rate first. But that's not what people do.
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.
The bad news is that ignoring the performance of people is almost as bad as shredding their effort in front of their eyes. Ignoring gets you a whole way out there. The good news is that by simply looking at something that somebody has done, scanning it and saying "Uh huh," that seems to be quite sufficient to dramatically improve people's motivations.
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.
The idea that you will make the right decision every time is very unlikely.
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.
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.
To summarize, using money to motivate people can be a double-edged sword. For tasks that require cognitive ability, low to moderate performance-based incentives can help. But when the incentive level is very high, it can command too much attention and thereby distract the person’s mind with thoughts about the reward. This can create stress and ultimately reduce the level of performance.
Giving up on our long-term goals for immediate gratification, my friends, is procrastination.
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.
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.
If I gave you now, $10 as a gift, how happy would you be? Would you be happy, is the marginal $10, the best use of $10 you can use? Of course not. If I have you a CD, you know exactly what you are getting and you will have a value for it. So, money has lots of problems with it.
We usually think of ourselves as sitting the driver's seat, with ultimate control over the decisions we made and the direction our life takes; but, alas, this perception has more to do with our desires-with how we want to view ourselves, than with reality.
...[D]ivision of labor, in my mind, is one of the dangers of work-based technology. Modern IT infrastructure allows us to break projects into very small, discrete parts and assign each person to do only one of the many parts. In so doing, companies run the risk of taking away employees' sense of the big picture, purpose, and sense of completion.
We need to believe that we're good people, and we'll do just about anything to maintain that perception.
People are willing to work free, and they are willing to work for a reasonable wage; but offer them just a small payment and they will walk away.
In life we encounter many people who, in some way or another, try to tattoo our faces.
None of us always make the best financial decisions.
Money is all about opportunity cost. Every time you spend on something, that's something you can't spend on something else.
People are irrational - and predictably so.
With everything you do, in fact, you should train yourself to question your repeated behaviors.
Take a brilliant, creative social scientist, without any respect for conventional wisdom and you get Ellen Langer. She is a fantastic storyteller, and Counterclockwise is a fascinating story about the unexpected ways in which our minds and bodies are connected.
There's something about [cyclically] doing something over and over and over that seems to be particularly demotivating.
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".
But because human being tend to focus on short-term benefits and our own immediate needs, such tragedies of the commons occur frequently .
In total, by giving people $30 bonus, Intel lost almost 5 percent of productivity. That's a lot. Now, think about it. You give money because you think this would increase motivation. It actually decreases motivation.
A very simple bad decision is to get into debt. And that is very expensive.
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.
Thinking is difficult and sometimes unpleasant.
We can think about how we reduce the pain in paying. So, for example, credit cards are wonderful mechanisms to reduce the pain of paying. If you go to a restaurant and you are paying cash, you would feel much worse than if you were paying with credit card. Why? You know the price, there's no surprise, but if you're paying cash, you feel a bit more guilt.
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