Why Smart Brains Make Stupid Decisions On Money, Work and Health

We just secured an interview with Ori Brafman, co-author of
Sway: The Irresistible Pull of Irrational Behavior
(Doubleday Business, 2008), to discuss our Dark Side (well,
he calls if "different hidden forces" and "psychological
undercurrents").

While reading some reviews about his book, I particularly
enjoyed finding, after the usual impressive long collection
of endorsements, this "disclaimer":

*DISCLAIMER: If you decide to buy this book because of
these endorsements, you just got swayed. One of the
psychological forces you'll read about in Sway is our
tendency to place a higher value on opinions from people in
positions of prominence, power, or authority. (But you
should still buy the book.)

Alvaro Fernandez (AF): Ori, what is SWAY? can you give us a
couple quick examples?

Ori Brafman (OB): Sway is about why perfectly rational
people make irrational choices. We interviewed business
executives, airline pilots, doctors, and even a Supreme
Court Justice to uncover the psychological forces that
affect our decision-making. What was especially interesting
was to find out that we all get swayed, and that these
psychological forces are much more ubiquitous than we
thought.

Take, for instance, the story of Jacob Van Zanten who was
the head of safety for KLM. One foggy afternoon, Van Zanten
took off without getting tower clearance, causing the
biggest airline accident in history. Why would this man,
who's the head of safety make such an irrational choice?

Or look at the story of Harvard Business School students
who paid $204 for a twenty-dollar bill.

AF: Happy to have attended Stanford... Now, how did that
happen?

OB: The professor set up an auction for a $20 bill. But
there was a twist. The winner would get the $20 bill. But
the second place bidder, would still have to honor his bid,
but would get nothing. At first there are lots of bidders,
but then as the bidding approaches $20 people start pulling
out. Inevitably, though two people stay in. As the bidding
continued to rise, the second-place person became
determined to not be the sucker who pays good money for
nothing in return. The amazing thing is that time after
time the auction continues well past the $20 point. People
are just so determined not to lose, that they keep on
bidding up.

AF: Why do people get Swayed?

OB: Without realizing it, we get swept up by a host of
different hidden forces. I think of it like being in a boat
in the middle of the ocean. It may look like we're standing
still, but underneath the surface, undercurrents move us
without us realizing it. The same thing happens with
psychological undercurrents. In Sway, we look at some of
the major undercurrents and explore how they intersect
triggering so many different irrational behaviors. The
thing is that we're prone to psychological sways all of the
time--whether we're conducting a job interview, going out
on a first date, or deciding whether to sell a stock.

AF: Let's be practical for a minute... what can people do
to Sway other people?

OB: We're constantly engaged in a hidden dance of sorts
where we sway people around us and are swayed by others.
One of the most unusual studies we encountered has to do
with what we call the chameleon effect. In the study, a
group of men and women--who had never met each other--were
told to have a short phone conversation. Now, before the
conversation, each man was shown a picture of the woman
he'd be talking to. Unbeknownst to the men, the pictures
were fake. And half the men were shown a picture of a
beautiful woman, while the other half were shown a picture
of a less attractive woman. The pictures had nothing to do
with how the real women looked like, and the real women had
no idea that there were any pictures shown. The kicker is
that the women who the men thought were pretty ended up
sounding beautiful on the phone. And the women who the men
thought were less attractive ended up sounding less
beautiful. We take on the roles others ascribe to us. Think
about that with employees or even with your kids. If we
think someone is smart, there's a good chance they'll live
up to that role.

AF: And what can people do to prevent being Swayed?

OB: The biggest step is to recognize how often we get
swayed. We have a tendency to think that our decisions are
rational, when in fact, different sways may have informed
the decision. Once we realize that we're prone to get
swayed, the second step is figuring out specific strategies
to counter the sway. It ranges from taking a long-term
perspective to using empirical models for job interviews.

AF: For example?

OB: We have a propensity to "diagnose" a job candidate from
the first moment we meet him or her. We assign a diagnosis,
and are unable to see things in a different light despite
objective evidence to the contrary. It's for this reason
that job interviews are terrible predictors of actual
performance. A much more effective approach is to conduct
very structured interviews that don't allow managers to get
swayed. In these interviews, the questions are pre-scripted
and focus on experience and ability rather than vague
things like "what's your biggest strength?" We call these
the Joe Friday interview (just the facts...) These
interviews may seem less personal, but they're actually
much more effective for actually selecting a good candidate.

AF: Ori, thank you very much for your time.

OB: My pleasure!

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Alvaro Fernandez is the CEO and Co-Founder of
SharpBrains.com, which reviews resources to test your brain
and improve cognitive ability. SharpBrains has been
recognized by Scientific American Mind, Newsweek, Forbes.
Alvaro holds MA in Education and MBA from Stanford
University, and teaches The Science of Brain Health at
UC-Berkeley Lifelong Learning Institute. You can learn more
at http://www.sharpbrains.com/