For those following my experimental, ham-fisted attempt at streaming Twitters from Dan Ariely’s lecture at the London School of Economics on Monday, a full podcast has been made available. He is funny, engaging, and I was sitting next to the guy whose wife was forced to confess she could not think of 10 reasons why she loved her significant other. Had I been younger, single, better looking, less shy, and that kind of man, I would definitely have seen an opportunity there.

It was all like good stand-up. So put it on your listening device for that next long run.

Also, I’m welcoming suggestions for what phone works best for Twits.

PS. To participate in counting the basketballs, pause the podcast and go here. Thanks to Seth Godin’s post here who also credits Bryan and Ken.

Here is a commercial version of the same:-

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A public service announcement: MIT’s leading behavioural economist Dan Ariely, who was covered in this post, will be speaking at the LSE on Monday (probably today by the time you see this) March 17th at 18:30. Details here. I’ll be there I hope, so tap me on the shoulder if you pitch up too.

Ariely, author of Predictably Irrational: The Hidden Forces That Shape Our Decisions, has an interesting back-story, but here is a brief synopsis from his website:-

My immersive introduction to irrationality took place many years ago while I was overcoming injuries sustained in an explosion (here is a description of my experiences in the hospital). The range of treatments in the burn department, and particularly the daily “bath” made me face a variety of irrational behaviors that were immensely painful and persistent. Upon leaving the hospital, I wanted to understand how to better deliver painful and unavoidable treatments to patients so I began conducting research in this area (see picture below). After completing this initial research project, I became engrossed with the idea that we repeatedly and predictably make the wrong decisions in many aspects of our lives and that research could help change some of these patterns.”

Professor Ariely also blogs here.

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The Knackered Hack office window looks out onto Solsbury Hill (or more precisely Little Solsbury) made famous by our local bard, one Peter Gabriel.

If you strip Gabriel’s song down, it tells a story about options and decision-making, and a powerful one at that. It alludes to the turmoil the lead-singer of Genesis went through after he left that iconic band. He got out in 1975, just before punk arrived, though that was not his motive: more creative exhaustion, as I understand it (one of our broken things, you could say).

If you are my age, you’ll know that admitting to liking Genesis as a teenager amounted to what kids these days call “social death.” However, in our modern eclectic world, all the sins of the past are forgotten; my friend Andy (see Journey of a Lifetime) even went to the Led Zep concert, and he was a dyed-in-the-mohair punk, if ever there was one.

Solsbury Hill (Looking down on)

I doubt that the world of decision-making research is going to anoint Gabriel with any honorary degrees, and it’s a long shot that he might be considered for a Nobel Prize in Economics. But why not? Perhaps he could share it jointly with Paul Simon, who did pioneering work in spreading the understanding of the confirmation bias through the song The Boxer, with what I consider one of the best lines in pop:-

Still, a man sees what he wants to see and disregards the rest”

But anyway, our options, and how we exercise them are really fundamental to success, or the avoidance of failure. So I was delighted when the Knackered Hackette’s cousin, Greg, brought to my attention the following New York Times story on Dan Ariely’s new book Predictably Irrational: The Hidden Forces That Shape Our Decisions, because it shows our aversion toward losing options — even when logic dictates that they will have no value to us. Ariely constructed a game to test how we respond to particular pay-offs. Players had to click on doors with rewards behind them:-

As each player went through the 100 allotted clicks, he could switch rooms to search for higher payoffs, but each switch used up a click to open the new door. The best strategy was to quickly check out the three rooms and settle in the one with the highest rewards.

Even after students got the hang of the game by practising it, they were flummoxed when a new visual feature was introduced. If they stayed out of any room, its door would start shrinking and eventually disappear.

They should have ignored those disappearing doors, but the students couldn’t. They wasted so many clicks rushing back to reopen doors that their earnings dropped 15 percent. Even when the penalties for switching grew stiffer — besides losing a click, the players had to pay a cash fee — the students kept losing money by frantically keeping all their doors open.

According to the report, what seemed to motivate was not the desire for future flexibility, but the pain of watching a door close.

“Closing a door on an option is experienced as a loss, and people are willing to pay a price to avoid the emotion of loss,” Dr. Ariely says. In the experiment, the price was easy to measure in lost cash. In life, the costs are less obvious — wasted time, missed opportunities. If you are afraid to drop any project at the office, you pay for it at home.

In my experience too, there is a lot of mental accounting that goes on just as the NYT says, and it takes real effort, or the words of a poet, to provide a consolidated view.

And because anywhere that the words diversity and complexity appear together Knackered Hack alerts go off, this is a treat for the weekend from a group called Hyannis Sound:-

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