Recently finished the book entitled "Sway: The Irresistible Pull of Irrational Behavior." A quick read that makes some interesting points about irrational behavior; something I knew little about of course!
The main point of the book is that we all act irrationally from time to time (some of us lots of the time) and there are predictable forces that cause us to act irrationally including the following:
- Loss aversion - this is a form of playing not to lose, making decisions in order to cut our losses, or avoid further losses.
- Commitment - this is our tendency to hold fast to our course of action in the face of accumulating losses. Their example: Steve Spurrier and the Gators. When Spurrier came to UF in the early 90's the SEC was a grind-it-out conference where coaches played, conservatively ( i.e. not to lose). Spurrier brought in the Run-N-Gun and started whipping the rest of the old, storied SEC programs. In response, the other teams stayed committed, and stuck even harder to their old models. And the Gators kept winning...much to the chagrin of us UT alums.
- Value attribution - we attribute value to people or things based on quick impressions. In other words, if the right people like something we attribute greater value to that thing than if the wrong people like it.
- Diagnosis bias - once we diagnose a situation we see the world through the lens of that diagnosis and all of reality conforms to our bias.
- Fairness perception - we'll often act against our own best interests if we feel that we are being treated unfairly. There is a cool experiment he talks about involving two subjects. Someone offers them a sum of money, let's say $100. One person gets to divide it any way they want and the other person can decide to accept or reject that division. If the second accepts they both get the money per the division by the first. If the second rejects, they both get nothing. Most of the time the first person divides it 50-50, the second accepts and they walk away happy. But, when the first person makes an imbalanced division - let's say he keeps $70 and offers the other $30 - in pretty much every case the second rejects it. In either case, whether it was a 50-50 or a 70-30 split, the second person would have come out to the good, but in the second case they rejected their own gain because of the fairness perception.
- Altruism-Pleasure conflict - people will perform better for altruistic motives than for rewards. In other words, if someone does something for altruistic motives and then you come back and offer them a reward for doing the same thing, you will often find them losing motivation and/or performing worse. You gotta read that chapter to understand how it works.
- Group Conformity - when in group settings, people tend to stifle their own opinions, often when their own opinions are patently correct and the groups are patently false, to go along with the group.
Go to the book website for even more information.