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Saturday, June 27, 2015

California Drivers: Predictably Irrational


In his book, Predictably Irrational, MIT Professor Dan Ariely, drawing on 20 years of research, demonstrates how people tend to behave irrationally in a very predictable fashion. Take, for example, the following advertisement that appeared in the web site of the Economist magazine that Ariely ran across:


Ariely wondered who would buy the print option alone when both the Internet and the print subscriptions were offered for the same price (this is worth reading -- in fact, the entire book is):
Now, the print-only option may have been a typographical error, but I suspect that the clever people at the Economist’s London offices (and they are clever— and quite mischievous in a British sort of way) were actually manipulating me. I am pretty certain that they wanted me to skip the Internet-only option (which they assumed would be my choice, since I was reading the advertisement on the Web) and jump to the more expensive option: Internet and print. 
But how could they manipulate me? I suspect it’s because the Economist’s marketing wizards (and I could just picture them in their school ties and blazers) knew something important about human behavior: humans rarely choose things in absolute terms. We don’t have an internal value meter that tells us how much things are worth. Rather, we focus on the relative advantage of one thing over another, and estimate value accordingly. (For instance, we don’t know how much a six-cylinder car is worth, but we can assume it’s more expensive than the four-cylinder model.) 
In the case of the Economist, I may not have known whether the Internet-only subscription at $59 was a better deal than the print-only option at $125. But I certainly knew that the print-and-Internet option for $ 125 was better than the print-only option at $125. In fact, you could reasonably deduce that in the combination package, the Internet subscription is free! “It’s a bloody steal—go for it, governor!” I could almost hear them shout from the riverbanks of the Thames. And I have to admit, if I had been inclined to subscribe I probably would have taken the package deal myself. (Later, when I tested the offer on a large number of participants, the vast majority preferred the Internet-and-print deal.)
Why are we so predictably irrational? Often, it's because most of us don’t know what we want until we see it in comparison to available alternatives (this is sometimes called "anchoring"):
The geniuses at the Economist aren’t the only ones who understand the importance of relativity. Take Sam, the television salesman. He plays the same general type of trick on us when he decides which televisions to put together on display: 36-inch Panasonic for $690, 42-inch Toshiba for $850, 50-inch Philips for $1,480. Which one would you choose? In this case, Sam knows that customers find it difficult to compute the value of different options. (Who really knows if the Panasonic at $690 is a better deal than the Philips at $1,480?) But Sam also knows that given three choices, most people will take the middle choice (as in landing your plane between the runway lights). So guess which television Sam prices as the middle option? That’s right— the one he wants to sell!
Of course, comparison is not the only reason why we sometimes behave irrationally. In fact, cognitive psychologists and behavioral economists have found that there are a series of heuristics (i.e., rules of thumb, strategies) that guide the choices we make. Another one is called the "availability" heuristic, which is the tendency to make judgements about the frequency of an event based on how easy it is to recall similar instances. As Steven Pinker notes people overestimate the probability of the types of accidents that typically garner headlines, such as plane crashes, shark attacks, and terrorist bombings but underestimate the likelihood of events that don't such as drownings, falls, and electrocutions (Pinker, "The Better Angels Of Our Nature"). And as I've noted before ("Wine, Wars (and Rumors of Wars), and Why (Unlike Indiana Jones) We Often Choose Unwisely"), this helps explain why most people think that Roman Catholic priests have sexually abused minors at a greater rate than male Protestant pastors when, in fact, they haven't.

Another heuristic, called "priming," refers to the tendency of our actions to be affected by prior cues. I think this helps explain much of the predictably irrational behavior many of us witness on California's highways. To wit:
  1. Drivers who won't use the passing lane during non-commute hours. Many of us get so used to not driving in the passing lane that we never use it (priming). So, we either sit impatiently in the middle lane (on a three lane freeway) behind a road boulder driving 10mph below the speed limit or pass them to the right.
  2. Closely related to this are drivers who don't drive in the diamond lane during commute time, but weave in and out of the other two or three lanes at 80-90mph in order to get ahead. Do they really think the highway patrol is less likely to notice their reckless driving than if they were driving the speed limit in the diamond lane?
  3. Also related to this are people who think the diamond lane is always in effect (to be sure, it often is in LA, but in the rest of the state it usually isn't), and then plop themselves in the diamond lane when it isn't in effect and drive 45.
  4. Then there are those of us who speed up as others attempt to pass (comparison). Most of us do this (usually unconsciously) when we drive and are not using cruise control.
  5. How about those of us who get upset when single drivers use the diamond lane (comparison), but we don't get upset when cars with two or more people don't use the diamond lane. If you think about it, it's the latter who slow the rest of us (i.e., those who aren't legally allowed to use the commute lane) down, not the former.

2 comments:

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  2. This Book Wonderfully Stipulates The Irrational Behaviour Of Drivers In California.

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