Here are Dan Ariely's slides from his presentation at the World Innovation Forum

1. The Hidden Forces That Shape Our Decisions

2. REALITY
VS.
SUBJECTIVE REALITY

4. D. Purves

5. BASKETBALL
Count the # of times that the players
in white pass the ball to each other
D. Simons

8. ILLUSIONS AS A METAPHOR

9. A FEW EXAMPLES OF
“DECISION ILLUSIONS”

10. % of drivers donating organs
0
20
40
60
80
100
De
4
Johnson & Goldstein (2003)
nm
ark
Ne
the
28
rlan
Un ds
ited
17
Kin
gdo
m
Ger
12
ma
ny
Au
100
stri
a
Bel
98
giu
m
Fra
100
nce
Hu
100
nga
ry
Pol
100
and
Organ donations?
Por
100
tug
al
Sw
86
ede
n

11. Opt-in
n
don ’t joi
and
Check the box below ox -- want to
b if you
s the donor program
participatechethe organ
in ck
on’t
pe o ple d
Opt-out
nd join
Check the box belowhif you -- a
x don’t want
t e bo
to participate che cksorgan donor program
n’t in the
le do
peop

12. What about professionals?
Redelmeier & Shafir (1995)

13. The Jam study
6 jams 24 jams
Approach 40% 60%
Try 1.4 1.5
Buy 30% 3%
Iyengar & Lepper (2000)

15. Behavioral Economics ...
Standard
What a piece of work is a man! how noble in reason!
how infinite in faculty! in form and moving how
express and admirable! in action how like an angel!
in apprehension how like a god!
Will Shakespeare (Act II,scene 2, of Hamlet)

17. IT IS ALL ABOUT .....
FREE LUNCHES !!!

18. Do we know Our
preferences?
measurement
Choice construction

19. Answer the following:
Please write 3 reasons Please write 10 reasons
why you love your why you love your
significant other significant other
Please write 3 reasons Please write 10 reasons
to buy a BMW to buy a BMW

20. Answer the following:
Indicate on the following scale how many times do
you floss a day:
0 1 2 3 4 5 6 7 8 9 >9
Indicate on the following scale how many times do
you floss a month:
0 1 2 3 4 5 6 7 8 9 >9
Should you call the dentist to make an appointment?

21. What do people infer
0 1 2 3 4 5 6 7 8 9 >9
“I am below the norm”
“I am above the norm”
0 1 2 3 4 5 6 7 8 9 >9

23. Do we know Our
preferences?
measurement
Choice construction

24. Asymmetric dominance
Attribute 1 R
R’
P
P’
Attribute 2

25. 16% 68%
0%
84% 32%

26. Tom Jerry’ Jerry
Form A
Tom Tom’ Jerry
Form B

30. The Hidden Forces That Shape Our Decisions
www.predictablyirrational.com
dan@predictablyirrational.com

31. The value of 1st decisions

32. Auctions of real products
Mean value Low ss# High ss# Increase
Trackball 16.25 10.38 21.52 107%
Keyboard 32.47 21.81 42.03 93%
$9 wine 15.80 11.62 19.55 68%
$82 wine 22.89 17.42 27.76 59%
Design book 18.81 14.15 23.00 62%
Belgian Chocolates 13.31 10.04 16.24 62%
High dependency between the prices of the
2 wines and 2 computer accessories

33. Tom Sawyer

34. Poetry
10
8 Poetry, charge
Poetry, pay
6
4
2
0
-2
-4
-6
-8
-10
Short Medium Long

35. How should people
What is the self herding
decide about buying a
version of these decisions?
cup of coffee?

36. ???

37. Arbitrary Coherence ...

39. VS.

40. We are inherently &
fundamentally emotional!

42. Hot & cold states
Never get a tattoo when
you’re drunk and hungry

44. Hyperbolic discounting
More later
Less sooner
Value
Time

47. Delayed gratification & commitment
✔ ✔
1 immediately 1 immediately
No temptation button
✔
10 w/ 10sec delay
Ainslie & Herrnstein 1974

48. Clocky

49. One step further ....

52. Free lunches !

54. The power of
expectations

55. taste tests
Non-Blind Blind
Colt 45
Coors
Pabst Guinness Budweiser Pabst
Colt 45
Miller Lite Guinness
Miller Lite
Coors
Budweiser

56. Coffee “with” add-ons
anise, nutmeg, clove, cardamom, etc

57. Expectations & beer: procedure
“Blind” ☺
?
“Before” B / +V ☹
?
“After” B / +V ?
☺

58. Price placebo
effect

59. The history of medicine is the history
of placebo

60. Placebo & Classical
conditioning
CS UCS UCR
Learning Trial: Salivation
Test Trial: Salivation
CS CR

61. Endogenous opioids
quot;God's Own Medicinequot;
Sir William Osler

62. A new exciting medication
Improved Pain Relief
Veladone-Rx
Didehydro-Methoxymethyl Phosphate (250 mg oral formulation)
Finally,
a more potent opioid-agonist
that provides fast-acting,
long-lasting relief for
moderate to severe pain.

63. Overview of procedure
quot;drug repquot; introduces medication
Improved Pain Relief Experimenter calibrates stimuli
Veladone-Rx
Didehydro-Methoxymethyl Phosphate (250 mg oral formulation)
First set of shocks
Participant ingests pill
Finally,
a more potent opioid-agonist
that provides fast-acting,
Second set of shocks
long-lasting relief for
moderate to severe pain.
Questionnaire administered
Debriefing

64. Brochure pp. 1 & 4

65. Brochure pp. 2 & 3

66. Pain reduction after the pill
40
Reduction
35 No reduction
30
25
20
16
10
6
0
Low Price High Price

67. Effects of country of origin
30
China
USA
20 22.2
10 13.2
9.6
0
-5.8
-10
Non Asians Asians

71. Juliet:
quot;What's in a name? That which we call a rose
By any other name would smell as sweet.quot;
Romeo and Juliet (II, ii, 1-2)

72. OTC medications?
A pilot study

73. I shall always be a flower girl to Professor
Higgins because he always treats me as a flower
girl and always will; but I know I can be a lady
to you because you always treat me as a lady
and always will.
—Eliza Doolittle
Pygmalion; George Bernard Shaw

74. (Dis)Honesty

78. Regret

80. Warfarin: Anti-stroke medication
Chance of stroke / past stroke ≈ 21%
Warfarin (if taken correctly) ≈ 3%
Cheap, with few side-effects
Seemingly VERY strong incentive to take it
However, only 66% adhere, even in best conditions
(warfarin clinic)
Can we increase adherence through incentives and
regret?

82. Regret
• Our happiness and decisions are not guided
only by our state...
• But also by other possible states
• And ones that easily come to mind

83. Lessons

85. VS.

86. Thanks
dan@predictablyirrational.com