Economic Rockstar

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050: Dan Ariely on Irrational Behavior and the Importance of Our Environment When Making Decisions

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050: Dan Ariely on Irrational Behavior and the Importance of Our Environment When Making Decisions

Dan Ariely is Professor of Psychology & Behavioral Economics at Duke University in North Carolina. Dan’s interests spanDan Ariely a wide range of behaviors, and his sometimes unusual experiments are consistently interesting, amusing and informative, demonstrating profound ideas that fly in the face of common wisdom.

In addition to appointments at the Fuqua School of Business, the Center for Cognitive Neuroscience, the Department of Economics, and the School of Medicine at Duke University, Dan is also a founding member of the Center for Advanced Hindsight.

Dan is the author of the New York Times bestsellers Predictably Irrational, The Upside of Irrationality, and The Honest Truth About Dishonesty and his latest book Irrationally Yours is now available.

Dan has received numerous honors and awards in medicine, psychology and economics.

Dan received a B.A in Psychology from Tel Aviv University, an M.A and PhD in Cognitive Psychology from University of North Carolina and another PhD in Business Administration from Duke University.

Influencer:

Professor Hanan Frenk, Tel Aviv University

Economists:

In this interview, Dan mentions: Brian Wansink. 

Psychologists:

In this interview, Dan mentions: Mike Norton and Elizabeth Dunn.

Economics:

In this interview, Dan mentions and discusses: Tragedy of the Commons, behavioral economics, public goods, pricing, decision-making, choice architecture, Ulysses Contract, happiness, asymmetric dominance effect and choice.

Takeaway:

“Think about your environment and always experiment” – Dan Ariely

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In this episode, you will learn:

  • about Dan Ariely’s traumatic experience resulting in severe burns.
  • how Dan Ariely found his love for psychology and behavioral economics.
  • why Dan will not be teaching his Irrational Behavior course on Coursera.
  • the problems with MOOCs like Coursera and why it is making the wrong choice regarding its open platform system.
  • why Dan was turned down for his first book – a cookbook and what advice he was given by a publisher.
  • why we as humans make very costly mistakes and what we can do about it.
  • how people eat more than they realise and how experiments in economics have shown this.
  • why we are bad at doing things that makes us happy.
  • the most common mistake companies make when making decisions or processing information.
  • how companies can avoid making mistakes.
  • if anger is a good or bad emotion.
  • the most surprising finding from Dan Ariely’s research.
  • the most surprising question put to Ask Ariely.
  • how to get poor people in Kenya to save.
  • how your environment matters when making decisions.

Quotes by Dan Ariely in Episode 50 of the Economic Rockstar Podcast:

“Choice architecture is this idea that our environment influences how we make decisions” – Dan Ariely

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“In the process of trying to not make any mistakes, companies create environments that punish risk and therefore punish ingenuity and growth” – Dan Ariely

“Tim is a very interesting character and he is experimenting on himself. We have to realize that his experiments have the validity that they work very well for him” – Dan Ariely

On Coursera:

“I think we do need rules for trolls. I think that pricing is a very good mechanism for some things and I’m not sure it’s a mechanism for all for all things like this. The reality is that Coursera probably over samples from the people on the tail of the distribution in terms of mental stability.” – Dan Ariely

Books:

Resources Mentioned by Dan Ariely:

Where to Find Dan Ariely:

Transcript:

The full transcript of this episode with Dan Ariely will be available shortly.

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