The sway of irrational behaviour

Posted by Ricki Sharpe on July 7, 2008
Filed Under Current Reading, Persuasion/Selling

Yes, it is yet another book on irrational thinking. There must be money to be made in explaining the science of our faulty thinking in an easy to understand manner. In a new book, Sway: The Irresistible Pull of Irrational Behaviour, the authors Ori and Rom Brafman outline a series of irrational behaviours that remind us just how often decisions are made not on sound reasoning but on emotional impulses that can have critical consequences.

Sway is a journey into the hidden psychological influences that derail our decision making when it comes to such questions as:

Why is it so difficult to end a doomed relationship?
Why do we listen to advice just because it came from someone important?
Why are we more likely to fall in love when there’s danger involved?
Why shouldn’t you pay a friend for a favour?
Why do we eat more when the plate is bigger?
Why do we remember things when they are presented in color on a loud commercial?
Why do we invest in things because a friend told us about them?
Why are we more motivated by loss than by gain?
Why the more we pay for things, the more we like them?

In Sway, the Brafman brothers answer these questions and more. Drawing on research from the fields of social psychology, behavioural economics, and organisational behavior, Sway reveals forces that influence every aspect of our personal and business lives.

As an example, consider the following:

In South Africa, a consumer lending bank wanted to push personal loans to 50,000 of its customers. Working together with a team of economists, the bank crafted several variations on the same basic loan offer letter. The different versions were randomly assigned to recipients and mailed off without the recipients ever knowing that the letter they had received was part of an experiment.

The letters included different interest rates (ranging from 3.25% to 7.75% per month); some featured a comparison to a competitorâ€™s rate, others a giveawayâ€¦and still others a photo of either a man or a womanâ€™s pleasant, smiling face.

Now, youâ€™d think that the customer would evaluate the offer based purely on interest rate and the specific terms of the loanâ€¦The unexpected effect kicked in with the least relevant variation: the inclusion of a picture of the smiling face in the corner. Men who received a picture of one of four smiling women were much more likely to sign up for the loan than the men who received a picture of a smiling man. The magnitude of this effect is â€˜about as much as dropping the interest rate 4.5 percentage points.

As always, Sway is supported by a web site and videos.

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