The Irrational Bundle. Dan Ariely

haystacks, not knowing which to select. Hours go by, but he still can’t make up his mind. Unable to decide, the donkey eventually dies of starvation.*

      This story is hypothetical, of course, and casts unfair aspersions on the intelligence of donkeys. A better example might be the U.S. Congress. Congress frequently gridlocks itself, not necessarily with regard to the big picture of particular legislation—the restoration of the nation’s aging highways, immigration, improving federal protection of endangered species, etc.—but with regard to the details. Often, to a reasonable person, the party lines on these issues are the equivalent of the two bales of hay. Despite this, or because of it, Congress is frequently left stuck in the middle. Wouldn’t a quick decision have been better for everybody?

      Here’s another example. One of my friends spent three months selecting a digital camera from two nearly identical models. When he finally made his selection, I asked him how many photo opportunities had he missed, how much of his valuable time he had spent making the selection, and how much he would have paid to have digital pictures of his family and friends documenting the last three months. More than the price of the camera, he said. Has something like this ever happened to you?

      What my friend (and also the donkey and Congress) failed to do when focusing on the similarities and minor differences between two things was to take into account the consequences of not deciding. The donkey failed to consider starving, Congress failed to consider the lives lost while it debated highway legislation, and my friend failed to consider all the great pictures he was missing, not to mention the time he was spending at Best Buy. More important, they all failed to take into consideration the relatively minor differences that would have come with either one of the decisions.

      My friend would have been equally happy with either camera; the donkey could have eaten either bale of hay; and the members of Congress could have gone home crowing over their accomplishments, regardless of the slight difference in bills. In other words, they all should have considered the decision an easy one. They could have even flipped a coin (figuratively, in the case of the donkey) and gotten on with their lives. But we don’t act that way, because we just can’t close those doors.

      ALTHOUGH CHOOSING BETWEEN two very similar options should be simple, in fact it is not. I fell victim to this very same problem a few years ago, when I was considering whether to stay at MIT or move to Stanford (I chose MIT in the end). Confronted with these two options, I spent several weeks comparing the two schools closely and found that they were about the same in their overall attractiveness to me. So what did I do? At this stage of my problem, I decided I needed some more information and research on the ground. So I carefully examined both schools. I met people at each place and asked them how they liked it. I checked out neighborhoods and possible schools for our kids. Sumi and I pondered how the two options would fit in with the kind of life we wanted for ourselves. Before long, I was getting so engrossed in this decision that my academic research and productivity began to suffer. Ironically, as I searched for the best place to do my work, my research was being neglected.

      Since you have probably invested some money to purchase my wisdom in this book (not to mention time, and the other activities you have given up in the process), I should probably not readily admit that I wound up like the donkey, trying to discriminate between two very similar bales of hay. But I did.

      In the end, and with all my foreknowledge of the difficulty in this decision-making process, I was just as predictably irrational as everyone else.

      Chapter 10

       The Effect of Expectations

      Why the Mind Gets What It Expects

      Suppose you’re a fan of the Philadelphia Eagles and you’re watching a football game with a friend who, sadly, grew up in New York City and is a rabid fan of the Giants. You don’t really understand why you ever became friends, but after spending a semester in the same dorm room you start liking him, even though you think he’s football-challenged.

      The Eagles have possession and are down by five points with no time-outs left. It’s the fourth quarter, and six seconds are left on the clock. The ball is on the 12-yard line. Four wide receivers line up for the final play. The center hikes the ball to the quarterback who drops back in the pocket. As the receivers sprint toward the end zone, the quarterback throws a high pass just as the time runs out. An Eagles wide receiver near the corner of the end zone dives for the ball and makes a spectacular catch.

      The referee signals a touchdown and all the Eagles players run onto the field in celebration. But wait. Did the receiver get both of his feet in? It looks close on the Jumbotron; so the booth calls down for a review. You turn to your friend: “Look at that! What a great catch! He was totally in. Why are they even reviewing it?” Your friend scowls. “That was completely out! I can’t believe the ref didn’t see it! You must be crazy to think that was in!”

      What just happened? Was your friend the Giants fan just experiencing wishful thinking? Was he deceiving himself? Worse, was he lying? Or had his loyalty to his team—and his anticipation of its win—completely, truly, and deeply clouded his judgment?

      I was thinking about that one evening, as I strolled through Cambridge and over to MIT’s Walker Memorial Building. How could two friends—two honest guys—see one soaring pass in two different ways? In fact, how could any two parties look at precisely the same event and interpret it as supporting their opposing points of view? How could Democrats and Republicans look at a single schoolchild who is unable to read, and take such bitterly different positions on the same issue? How could a couple embroiled in a fight see the causes of their argument so differently?

      A friend of mine who had spent time in Belfast, Ireland, as a foreign correspondent, once described a meeting he had arranged with members of the IRA. During the interview, news came that the governor of the Maze prison, a winding row of cell blocks that held many IRA operatives, had been assassinated. The IRA members standing around my friend, quite understandably, received the news with satisfaction—as a victory for their cause. The British, of course, didn’t see it in those terms at all. The headlines in London the next day boiled with anger and calls for retribution. In fact, the British saw the event as proof that discussions with the IRA would lead nowhere and that the IRA should be crushed. I am an Israeli, and no stranger to such cycles of violence. Violence is not rare. It happens so frequently that we rarely stop to ask ourselves why. Why does it happen? Is it an outcome of history, or race, or politics—or is there something fundamentally irrational in us that encourages conflict, that causes us to look at the same event and, depending on our point of view, see it in totally different terms?

      Leonard Lee (a professor at Columbia), Shane Frederick (a professor at MIT), and I didn’t have any answers to these profound questions. But in a search for the root of this human condition, we decided to set up a series of simple experiments to explore how previously held impressions can cloud our point of view. We came up with a simple test—one in which we would not use religion, politics, or even sports as the indicator. We would use glasses of beer.

      YOU REACH THE entrance to Walker by climbing a set of broad steps between towering Greek columns. Once inside (and after turning right), you enter two rooms with carpeting that predates the advent of electric light, furniture to match, and a smell that has the unmistaken promise of alcohol, packs of peanuts, and good company. Welcome to the Muddy Charles—one of MIT’s two pubs, and the location for a set of studies that Leonard, Shane, and I would be conducting over the following weeks. The purpose of our experiments would be to determine whether people’s expectations influence their views of subsequent events—more specifically, whether bar patrons’ expectations for a certain kind of beer would shape their perception of its taste.

      Let me explain this further. One of the beers that would be served to the patrons of the Muddy Charles would be Budweiser. The second would be what we fondly called MIT Brew. What’s MIT Brew? Basically Budweiser, plus a “secret ingredient”—two drops of balsamic vinegar for each ounce of beer. (Some of the MIT students objected to our calling Budweiser “beer,” so in subsequent studies, we used Sam Adams—a substance more readily acknowledged by Bostonians as “beer.”)

      At about seven that