Chris DeMuth Jr:
Anything that you would add if it were published today?
First of all thanks a lot. It is not often that I get questions that I have not yet heard before. Yours are definitely in that category so that makes it much more interesting to answer. So, what has changed since I wrote the book? I don't think that much has changed in the world. The first chapter in the book is about the role of bonuses and I don't think that people understand yet the role of bonuses. But what has changed is that I am starting to understand better how detrimental financial bonuses are. Since the research for this book was done, we've had the chance to do much more research, going into companies and looking at bonuses. My confidence in the idea that financial incentives can backfire has increased dramatically. That is clearly very important. The range of experiments that we have done on bonuses to show that they are ineffective has increased. It seems to be a robust and important finding and we need to think seriously how to deal with it. Sadly, we don't know of any companies yet that have thought about this carefully besides the companies that are working with us and are in the process of improving things.
In terms of online dating, I think that it is becoming more and more apparent with more and more research that the online dating algorithms are really not working and these companies are not serving their clients in the right way. There are some startups here and there that are starting to do better things - on virtual dating and games and more face-to-face meeting - but the big players are not doing things the right way in general.
Chris DeMuth Jr:
Are there any specific investments that you have made or would make today as a result of your ideas?
In terms of investment, it is kind of interesting that when people think about companies, they do not think about how they treat their employees. But for me employee loyalty is an incredibly important variable. We've looked at data from many many small businesses and we saw how different turnover is at different companies and the effect on productivity. So, if I would think about investing along the lines of behavioral economics, I would look at how companies are willing to experiment, how they are willing to learn, and how they are treating their employees and what their turnover is. That would help me figure out the companies that I would be willing to invest in.
The provocative follow-up to the New York Times bestseller Predictably Irrational
- Why can large bonuses make CEOs less productive?
- How can confusing directions actually help us?
- Why is revenge so important to us?
- Why is there such a big difference between what we think will make us happy and what really makes us happy?
In his groundbreaking book Predictably Irrational, social scientist Dan Ariely revealed the multiple biases that lead us into making unwise decisions. Now, in The Upside of Irrationality, he exposes the surprising negative and positive effects irrationality can have on our lives. Focusing on our behaviors at work and in relationships, he offers new insights and eye-opening truths about what really motivates us on the job, how one unwise action can become a long-term habit, how we learn to love the ones we're with, and more.
Drawing on the same experimental methods that made Predictably Irrational one of the most talked-about bestsellers of the past few years, Ariely uses data from his own original and entertaining experiments to draw arresting conclusions about how-and why-we behave the way we do. From our office attitudes, to our romantic relationships, to our search for purpose in life, Ariely explains how to break through our negative patterns of thought and behavior to make better decisions. The Upside of Irrationality will change the way we see ourselves at work and at home-and cast our irrational behaviors in a more nuanced light.