Pull of Irrational Behaviour

I love reading in the summer, picking a spot in the shade and indulging in literary guilty pleasures. Other times, I wander to the business section of book stores and see what authors have to say about the world of business and how we can or can not succeed. My last trip unearthed the latest best seller, Sway, the Irresistible Pull of Irrational Behavior.

One example of extremely irrational behaviour that Ori describes is The $20 bill auction which is part of professor Max Bazerman of Harvard Business School first lesson each year. On the first day of class, Bazerman offers a $20 bill for auction. Everybody is free to bid; there are only two rules. The fist is that bids are to be made in $1 increments. The second rule is a little trickier. The winner of the auction, of course, wins the bill. But the runner-up must still honor his or her bid, while receiving nothing in return. In other words, this is a situation where second best finishes last. Bazermand has seen the bidding go as high as $204. Most of the students drop out before $20 but there are always two students who can not stop and do not want to be second. This behaviour and experiment helps explain some peoples' behaviour when they can not stop irrational behaviour which is not netting them positive results.

Brafman cites many other interesting examples of irrational behaviour and explains the cause. Some of the examples have very real and tragic consequences.

After reading this book in one day, I noticed that Brafman also co-authored The Starfish and the Spider, a discussion of leadership organizations versus top-down controlled organizations. Again an interesting and thought provoking read.

Now, it is time to indulge in some guilty pleasure before reading a work by Naomi Klein.