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Dan Ariely - Professor of Behavioral Economics and a Harvard Professor. Behavioral Economics the market crash was a good sign of unpredictability. He started in the behavioral economics whilst in hospital after being injured in an explosion = 70% burns. His nurses used to rip the bandages off rather than take them off slowly - the nurses know that they word right and the patient wasn't allowed to argue. He decided to research pain and he went out and bought a carpenters vice and experimented on students putting fingers in the vice etc.
What he learnt was that the nurses were wrong in many ways. They learnt that it is better to start with high levels of pain and finish on low pain - the nurses had it wrong by starting at the feet and starting at the head - finishing with high levels of pain. Why did the nurses get it so long?
Why do people decide to volunteer organ donation as some countries do a lot of and some countries did not much. Some countries such as Denmark don't give many and Sweden give a lot, France gives more then the UK, It is apparently to do with the enrollment form - one says check the box if you want to participate and people don't check the box and in other countries the form says if you don't want to participate check the box and of course people still don't check and therefore participate! If you look as the data in isolation you cold make all sort of assumptions about culture etc. but in reality it is our laxity to choose - we don't know what to do and we pick the default.
The Jam Study - in a supermarket at the end of the aisle you see two jam tasting booths - one with 6 jams and one with 24. More people approach the 24 jam booth but taste the same number - they were given a coupon to buy jam - that is any jam. However only 3% of people bought jam who had visited the 24 jam booth but 30% of people who visited the 6 jam booth. Twenty Four jams are too much and consequently didn't buy jam - if there is too much choice we take the default option and therefore do nothing.
Dan showed an Internet connected pill box - Qumadin is a stroke medicine which reduces the risk of a second stroke. The compliance rate is very low as people don't seen to take it. What could motivate people to take the pills - the lottery is a way of motivating people, if we give people a chance of winning a lottery and the ability to win $30 - this does motivate people although it has a negative effect on those who don't win. He gives everyone a lottery ticket whether people have opened the pill box or not - he phones people up and said that because they didn't open the pill box they didn't win the lottery and compliance rises to 95%.
We don't have well defined preferences. Please write 3 reasons why you love your significant other or the other question is write 10 questions. People run out of reasons before they get to 10 and therefore choose 3 - they ask themselves how can I possibly love this persons if I cant think of 10. He uses this with his students he asks them 15 things that he could improve on the course and because they can't think of things they all say the course is fantastic.
Looking at physical attraction asking who did they want to date from pictures on the screen. There was Tom, Jerry and Ugly jerry and Tom - if you go bar hopping you want to take a slightly uglier version of yourself.
Story about cheating - Dan became interested when the Enron problems were happening. Was it just three bad apples or was there something more endemic. He gave out to his students a list of math problems and gave them only 5 minutes and paid them $1 for every question they got right - the average was 4. He then asked them to do the same but when he asked them how many they got write he asked them to shred the answers first the answers went up to 7 - so there was cheating. He tried varying the amount from 10c to $10 but this had be impact. Lots of people just by a little bit - even when asked to take money from a bowl outside the room.
People want to benefit from cheating - not from the perspective of being caught but mire about how I feel about myself. he asked people 10 books that they read at university and the 10 commandments. People couldn't remember the 10 commandments and nobody cheated. Same thing was done with Harvard honor code and people signed the sheet and didn;t cheat - even though Harvard doesn't have an honor code! There is something about peoples own view of the morality
Interesting - Getting people to sign at the top of form that they are telling the truth increases accuracy more than when they sign at the bottom.
General comments about the economy - in his experiments they lost a little to the big cheaters but they lost much more to all the little cheaters. SImilar to what we have seen recently in the economy. In the sub-prime mortgage there was a conflict of interest as it becomes harder to evaluate it becomes easier to cheat.
Are we superman or homer simpson? We build cars, phones etc. to do the things we can't do. How would the roads look like if people were perfect drivers - no hard shoulder, roads wide enough for a car and no speed limits - is this a reality - clearly not!
We have mental limitations and we have to design things to accommodate mistakes.
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