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Stronger Contracts, Less Trust

Business agreements are usually secured by written agreements that define the obligations of the parties and state what happens under various conditions. Having been party to a few business deals launched based mostly on enthusiasm and trust, I can certainly vouch for the importance of such agreements. Not everyone relies entirely on extensive documentation, though – oilman T. Boone Pickens famously collected $3 billion when courts upheld his handshake deal to acquire a piece of Getty Oil. And, we find, there’s actually scientific evidence that stronger contracts can reduce trust. […]

By |August 4th, 2011|

The Upside of Irrationality by Dan Ariely

Nobody is doing more to add to our knowledge of the irrational side of human behavior than Dan Ariely. Not only does he conduct experiments that are elegant in their simplicity, but he writes about his work and that of other researchers in a highly acccessible way. Upside is the successor to the bestselling Predictably Irrational, and it takes to new topics, ranging from CEO pay to speed dating.

By |July 12th, 2011|

Secrets of the Moneylab

Book Review: Secrets of the Moneylab: How Behavioral Economics Can Impact Your Business by Kay Yut Chen with Marina Krakovsky

Economics can be dry stuff – remember “macro,” “micro,” and supply/demand curves? Fortunately, Secrets of the Moneylab is a […]

By |January 25th, 2011|

Book Review: Predictably Irrational

Predictably Irrational by Dan Ariely does a great job of demolishing the idea that people make decisions in a rational manner. Ariely, a behavioral economist at Duke, describes dozens of experiments that show how we procrastinate, when we cheat, how we interpret prices (definitely a neuromarketing hot button), and much more. Ariely’s work is fascinating at least in part because of the simplicity of most of his experiments. Instead of using multi-million dollar fMRI machines, Ariely’s work tends to involve a simple concept, a few props, and willing subjects (always plentiful on college campuses). The simplicity is deceptive, though, because the results demonstrate the complexity of the brain’s decision-making process. […]

By |July 7th, 2008|