Dan Ariely, James B. Duke Professor of behavioral economics, conducts research focusing on the neural mechanisms behind human decision making, and in particular the irrational decisions that humans make every day. He is author of the best-seller "Predictably Irrational," published in February of last year, which challenges decisions based on rational thought and explores human decision making through a variety of social experiments. Ariely has also conducted much of his research at Duke, particularly on undergraduate and graduate students.
The Chronicle's Mona Ascha asked Ariely about his latest work and future endeavors.
The Chronicle: You have completed some groundbreaking work in the field of behavioral economics. What led to your involvement in this field?
Dan Ariely: It was health-related actually. I was injured a long time ago and as a burn patient I had many experiences in the hospital.
One thing I noticed was the process by which people take bandages off of burn patients. The nurses wanted to rip the bandages off quickly and get it over with, so that the patient would only experience pain for a short period of time. I didn't like this approach, however, and I continuously tried to convince them to do the opposite.
I then asked myself, what is less painful-longer time with less intensity of pain, or shorter time with more intensity of pain?
After I left the hospital I began to conduct experiments to test these theories and found that as humans we don't incorporate duration into our pain, it is the intensity that is important. So while it may be intuitive to get it over with quickly, it may not be the best decision to make.
I like to look at myself as a social science hacker-I think about problems in the world and how we can fix them.
TC: What is the premise of your latest book, "Predictably Irrational"?
DA: "Predictably Irrational" has 13 chapters, and each chapter describes a different irrational behavior. A lot of my work isn't in health care-I do research on eating, coffee-drinkers, expectations, lying and procrastination. The book mostly focuses on my experiments; it gives a very subjective view of the field.
For example, I have a chapter on procrastination-for which students are a very good demographic to study. In a set of experiments we had students come in on the first day of class, and the instructor tells them they have to write three papers by the end of the semester and they can choose when to submit them.
Rationally, students would say the last day of the semester, but students who know they are procrastinating will set an earlier deadline for themselves to force themselves to work on the paper. Technically, however, this behavior is irrational.
TC: What are some new projects that you are working on?
DA: My new book is about research in the same vein, except I focus on fewer topics more broadly and in more detail. One of these topics is work-what motivates people to work, how hard they work and how much pride goes into work.
My new research is focusing on several concepts that emerged in "Predictably Irrational." These concepts include cheating, stealing and end-of-life decisions.
One thing that I have noticed is that people tend to make irrational decisions towards the end of their lives-in particular, they spend a lot of money near the end of their lives.
TC: What is the future of behavioral economics?
DA: The thing about behavioral economics is that it is about real life; it is a very applied field. The recent economics meltdown has really helped this sub-field as well.
Behavioral economics can help facilitate drafting of policy. One of the biggest lessons from behavioral economics is that intuitions are often wrong, so one must experiment and try different things.
Policy must become more experimental, with several versions of a policy being implemented in order to determine which one is optimal. I think we need more science in policy-drafting.
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