The Science of Irrational Decisions

The Rat Race Trap blog has a look at one aspect of the irrational decision-making process humans employ, based on the book Predictably Irrational by Dan Ariely. "Professor Ariely describes some experiments which demonstrated something he calls 'arbitrary coherence.' Basically it means that once you contemplate a decision or actually make a decision, it will heavily influence your subsequent decisions. That's the coherence part. Your brain will try to keep your decisions consistent with previous decisions you have made. I've read about that many times before, but what was surprising in this book was the the 'arbitrary' part. ... [In an experiment] the fact that the students contemplated a decision at a completely arbitrary price, the last two digits of their social security number, very heavily influenced what they were willing to pay for the product. The students denied that the anchor influenced them, but the data shows something totally different. Correlations ranged from 0.33 to 0.52. Those are extremely significant."

Comments

TFA

[TubeSteak]

http://www.ratracetrap.com/the-rat-race-trap/irrational-decisions-anchoring-and-arbitrary-coherence.html

Editors sleeping on the job
What a sweet job

Re:I'm not one to normally complain about articles

[Victor_0x53h]

Seriously..

It looks like the blog is here: http://www.ratracetrap.com/the-rat-race-trap/irrational-decisions-anchoring-and-arbitrary-coherence.html

Anchoring

[INeededALogin]

Nothing really new here. Decisions making based on anchors is a large part of why we use Planning Poker when doing our estimations. All it takes is that one guy that says everything is easy to influence everyone's brain to under-estimate a project.

Re:Extremely significant?

[WAG24601G]

TFS never claimed it was a strong correlation. It's a highly SIGNIFICANT correlation (meaning that the probability that the result occurred by chance and not systematically is very low, less than 5%).

Now, whether or not .33 is a STRONG correlation is another matter. By most definitions, it is not, although .52 would be a moderate correlation. However, the correlation does suggest that about 10-30% (r-squared) or more of the variation in subjects' decisions was accounted for by their social security numbers (accounted for != caused by, but we can make inferences based on the experimental design). Over a lifetime, 10% variation due to random irrelevant factors (like SS number) is serious, and 30% is HUGE. In that sense, it is a meaningful result, even if the correlation is not a "strong" one in terms of proportion.

Re:So

[snowraver1]

I disagree. I find watching E-Daily, or Entertainment Tonight, or any other celebrity show physically nauseating. It's literally an assault on my brain.

correlation != statistical significance

[crmarvin42]

Apparently I'm in a very pedantic mood today.

Correlation is a measure of how well the model describes the data. So according to the summary, 33 to 52% of the variation in the data was explained by the model. Depending on the inherent variability in the criteria being evaluated, that could be very good or very bad. In my line of work that would be very bad, but for social sciences such as sociology, that is very high. It all comes down to how many variables you can control. The more control, the less variation, the higher the correlation when the model is a good fit.

Significance is a measure of the probability that the response seen is due to random variation or errors in sampling. They may have given a measure of significance in the article, but the summary did not.

Re:So

[Mr Z]

You're literally full of it. "Literally" has been used as an intensifier since the 17th Century. Get over it. And before you go off on the author of the article I just linked... He's a dictionary editor. I think he spends more time with a dictionary than any of us.

Re:So

[causality]

So, what you're saying is, you're jealous of the ability of an entertainer to entertain, and because you once arbitrarily used the defense that what you do is more worthwhile than what they do in order to get a false sense of superiority, your brain keeps doing it to stay internally consistent?

You remind me of those people who call others "racist" because they disagree with Barack Obama on matters of public policy. Just like them, I am sure that you do it knowing that no one can rationally argue against something so absurd. For one thing, it would require them to prove a negative. That's why you never feel that before making such statements, you have a burden of proof to establish a) that jealousy of entertainers is the only possible reason to suggest that maybe there is something wrong with obsessing over strangers, or b) that the reasoning I openly explained is fatally flawed and that you know how it may be corrected.

Your failure to address or even to recognize that such a burden of proof goes along with your claim, combined with your insistence on making this into a personal matter instead of giving your counter-argument, can be taken as evidence that you are reacting emotionally, perhaps because I offended you. There was nothing malicious in what I said, so your offense is your own and it begins and ends with you. Therefore, you get to deal with it and will receive no relief from me.

I'll give you a free tip for the future: try these tactics on people who are unable to see right through them. You'll be much more "successful" if you really want to call it that.