Sway14 Jun 2009
While travelling to Seattle, I went shopping to the bookstore and purchased “Sway – the irresistible pull of irrational behavior”, by Ori and Rom Brafman. Each of the book’s chapter illustrates a specific bias which leads individuals to make poor decisions, through multiple experiments or real-life stories. If you are familiar with decision theory, and specifically with decision biases – the way our brain plays tricks with us and processes information poorly, misleading our judgment – you will probably not learn much from the book. Even then, it’s a pretty entertaining read; the style is light, and the anecdotes and cases funny and very clearly explained. If you are not familiar with the topic, I recommend the book: it is a good primer to recognize traps and make better decisions! The part which was new to me was the chapter “Compensation and Cocaine”. It seems that monetary decisions and altruism are processed in completely different parts of the brain (no surprise so far), but also that when one is active, it shuts down the other. Furthermore, the monetary decision brain is processed in the same place as the center of pleasure derived from sex, drugs or gambling (not sure what this says about the financial sector…), which has very practical implication in designing incentives. From what I gather, altruism provides a stronger motivation than money – but surprisingly, mixing both doesn’t add up: the pleasure center will completely override altruistic motivation, which is then ignored – and reduces overall motivation. Overall, fun read – recommended!
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