I’m currently reading Predictably Irrational: The Hidden Forces That Shape Our Decision by Dan Ariely. Essentially, it looks at common decisions people make that really aren’t rational. I’m about 3/4th of the way, and so far it’s held my attention pretty well.
One of my favorite examples notes that people will drive across town to save $7 on a $25 item. However, given the opportunity to save $7 on a $450 item, they won’t bother. It’s so true, and yet irrational. Saving $7 is saving $7 regardless of the item’s price.
Here’s another one:
Imagine you are walking past someone trying to change a flat tire. How would you you react if they asked for help? How would you act if they offered to pay you $1 to help? If you’re like most people, you would help for free but pass when you were offered low compensation. Is that rational?
If you liked Freakonomics you should check this out. If you never read Freakonomics, but were intrigued by these examples - I’d recommend picking up both books.
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The rational thing to do : subscribe in a reader
I just read the following in David Friedman’s book Hidden Order: The Economics of Everyday Life.
…consider someone making two decisions - what car to buy and what politician to vote for. He can improve either decision by investing time and effort in studying the alternatives. In the case of the car, his decision determines with certainty what car he gets. In the case of the politician, he decision changes by one ten millionth the probability that one candidate will win. If the candidate would be elected without his vote, he’s wasting his time; if the candidate would lose even with his vote, he is also wasting his time. He will rationally choose to invest much more of his time in the decision of which car to buy - the payoff to him is enormously greater. We expect voting to be characterized by rational ignorance - it is rational to be ignorant when the information costs more than it is worth.
I’m posting it much less as a statement on elections as I am for the concept of rational ignorance. I don’t have much to add - I just thought it was interesting.
Ever read a newspaper article that reads like a mystery? How about one that uses the first paragraph as a teaser or introduction to the real story? With the exception of a possible editorial piece, you probably haven’t.
It turns out, journalists are taught to put the most important info at the top, and work their way down. The information least crucial to the story shows up at the end. Each story follows the same predictable format.
There are a few reasons they do this. First, it allows readers to scan multiple stories and absorb a lot of information quickly. Basically, you can get the core news without reading the whole newspaper. Second, it allows the editors of the paper to cut down stories at the last minute. If space doesn’t permit, they can remove sections from the end without worrying about the effect on the story.
Thankfully, this blog is not a newspaper - so I get much more creative license.
Anyway, I just finished reading Made To Stick by Chris and Dan Heath (their mom must be proud). I thought it was going to be about why some ideas catch on and other don’t - but it turned out to be more of tutorial on communication.
I really enjoyed it. Virtually every chapter had me thinking about what to do in my next presentation, how to improve my marketing copy, etc. The newspaper bit was just a small part, but I got to try it try it out in yesterday’s post.
Overall, I’d recommend the book. If you ever need to get people to pay attention to your message, remember it, care about, and/or act on it - check this book out. Literally. Go to the library, and check it out.
I picked up Four Hour Work Week today (yeah, from the library drive thru). I read the first chapter and felt like I was watching an infomercial. The writer seemed to just boast about how great the his life was. “I travel, work very little, and make lots of money. La-la-la-la.”
It doesn’t seem too promising, but I’ll keep reading. Hopefully it gets into the good stuff about outsourcing that I was expecting. If that’s the case, I’ll have someone post a summary when I’m done.
I finished The Long Tail too. Like most books, it probably could have been half as long and gotten the same point across. Overall though, good stuff.
On a supermarket rack, the shelf right below eye level outsells the bottom rack five to one. Consequently, manufacturers have to pay a much higher slotting fee to have their products put in that position.
Anyway, I thought it as interesting. I read (heard) it in The Long Tail. That’s right, I haven’t finished. Give me a break - it’s eight hours long.
Today I did a search for the book Four Hour Work Week. As far as I know, it’s about a guy that outsourced almost everything in his life so that he could relax and spend the time he was working on the important stuff. Apparently he will show me how to find an MBA in India that will gladly be my personal assistant for $5 an hour. I thought it was an interesting concept (I’m a big fan of outsourcing non-core activities), so I think I’ll give it a read.
Anyway, this post is really about my local library. I found the book in their online catalog. They offer it in print AND as a downloadable MP3. I think the latter is more appropriate (outsourcing someone to read me the book, that is), but I already have three audio books that I haven’t finished so I went the more traditional route. My library doesn’t actually have it - so they will order it for me from neighboring town. When it arrives, they’ll send me an e-mail. Then, I’ll drive over there and pick it up at their drive though window. Finally, when the book is almost due, they will send me another e-mail as a reminder to return it on time.
I’m impressed that the local library has taken so many steps to embrace technology and today’s fast paced society. Generally, public entities are behind the times. I don’t know that the library is cutting edge - but I think they are doing a good job of keeping up. It’s tax dollars well spent, if you ask me.
Now, if I could just get them to ship it to me instead of making me go pick it up - we’d be in good shape.
The Long Tail -by Chris Anderson
I know this book was popular a couple years ago, but I’m just getting around to reading it now. Well, technically I’m not even reading it - I got it as an audible e-book (book on tape mp3). I just started listening to it, and so far so good.
In case you are are as behind in your reading as I am, the premise is that the internet and digital distribution has vastly increased the number of products that can be sold profitably. Basically, because of space and proximity restrictions in traditional channels (stores, TV channels, etc.) - it has only been profitable to offer products that are consumed in mass. However, with those restrictions removed, companies can now offer products that sell only a few units because the aggregate of all the “onesy and twosy” sales is huge.
Think of iTunes compared to Tower Records. Tower can only afford to carry the best selling records because of limited shelf space. iTunes however, without space restrictions, can make a lot of money selling the thousands of obscure CDs that may only be downloaded a couple of times per month. All those single downloads add up.
It’s kind of the opposite of conventional wisdom (including stuff I’m written about here) that suggests limiting the amount of products you carry in order to stay focused in terms of profitability and branding. Then again, I suppose it really depends on the situation. Regardless, I’m excited to finish listening. Maybe I’ll write about it again - or maybe you’ll just have to go read (or listen) to it yourself.
