Invisible Forces: An Exploration in Irrational Behavior by Rational People

Believe it or not, I actually owned a small amount of Netscape stock right after it went public in the mid ‘90s. I watched in awe as the price soared and my little investment doubled in value. I felt like a wall street warrior and marveled at my investment prowess. Wall Street was mine for the taking and nothing was going to stop me.

Then one day the price went down. Only a little at first and certainly not enough to worry about. But then the downward slide began and I watched in as the price went lower and lower and lower. How could this be? Netscape was the darling of Wall Street at the time and made ‘surfing the net’ a mainstream experience. With unbridled confidence I watched and waited. And waited some more. I just knew it would rebound.

Unfortunately for me, after a few years of “waiting”, I finally sold the stock at a loss after the AOL buyout. It was only after reading “Sway – the Irresistible pull of irrational behavior” by Ori and Rom Brafman that I understood why I had acted the way I did. It was little comfort to know that I acted like so many investors and was swayed by a force almost as powerful as gravity – Loss Aversion.

Ori and Rom Brafman explore several psychological forces that influence decisions we make and the actions we take on a daily basis. These forces are stronger that any of us realize, and have a significant impact on our lives. Think of these forces as Dark Matter for our minds, that exert an unseen force that sways us into taking actions that we really should not be taking. Rational people doing irrational things. What are these forces that have us in their grip? Is there a way to overcome them? Ori and Rom present the evidence and provide the information needed for us to break free.

Stories Capture our Attention

The Brafman’s employ a very powerful technique to convey their message and hold your attention: they tell stories. And good one’s at that. They masterfully summarize numerous medical and psychological studies that support their observations and illustrate their points. After reading the Preface, I too was swayed into a reading frenzy that caught the attention of my wife. My lovely bride of 24 years noticed my I-can’t-put-this-book-down behavior and promptly reminded me that I had several books from the library that I needed to finish before I continued with Sway. My books went back to the library the next day.

No One Likes a Loser

I read the story about the airline pilot that ignored years of training and experience while trying to minimize a large perceived loss, and paid for it with the lives of the crew and passengers of his doomed flight. Sometimes we can be swayed into consequences far worse than a financial loss. Then there is the professor who consistently gets students to pay significantly more than $20 for a $20 bill. Or the investor who like me, watches his investment dwindle all the while thinking it will rebound.

These are all examples of Loss Aversion – a psychological force that causes people to go through great lengths to avoid a loss (even when the action to avoid the loss is greater than the loss itself). No one wants to be a loser, even when it’s the best option to take.

Don’t Judge a Book by its Cover

There was the story of the young scientist that found an archeological discovery that revolutionized the thinking of the origins of humans. Unfortunately he was ostracized because he was relativity unknown in the scientific community. No one would believe his find until many years after the discovery. Meanwhile, a well known archeologist was praised for a discovery that ultimately turned out to be false.

Value Attribution is a nasty little force where you make a conscious or subconscious judgment based on your initial perceived value. If you think someone is a bozo, then they will always be a bozo in your eyes. No matter what they do, their work will be suspect. As Jim McCarthy said in his book “Dynamics of Software Development” – “Don’t flip the bozo bit”. You shouldn’t ignore someone’s input just because they made a few mistakes or are not viewed as the resident expert on a team.

There is Always More to the Story

Ori and Rom tell a poignant story about a young toddler that’s not feeling well and has a mother that seems to be “over reacting” to the situation. After three days and three trips to the emergency room, the toddler sadly dies from her illness. The doctors were focused on the over reacting mother instead of the sick patient.

Unfortunately the doctors fell prey to the force of Diagnosis Bias and a little girl paid the ultimate price. Diagnosis Bias occurs when one ignores the facts and observations that contradict your initial assessment of a situation or a person.

Treat People the Way you Want to be Treated

There are a set of studies that highlight the irresistible pull of a force known as Procedural Justice – it’s the process and not the outcome that matters. People want to be treated fairly – even convicted felons. When studied, convicted felons felt they were treated fairly based on the amount of “time their lawyer spent with them”. Even when the outcome was not in their favor and they went to jail, the felons felt the process was fair.

Are we Doomed to be Swayed?

Now that we’re aware of these forces, can we turn them to our favor? How can we benefit from this knowledge? As one reads through each chapter, Ori and Rom provide us with tips on combating these forces as well as providing sound advice in the Epilogue. Once you know these forces exist, then you are way ahead of most people and can change your behavior.

About a month ago, I was the lucky recipient of one of the free copies of Sway from PickTheBrain.com and thought it was fitting to write this book review. I hope you enjoy this book as much as I did. For some reason I have the irresistible urge to read the book a 2^nd time. Hmm, could there be yet another psychological force at work here?

This guest post was written by Victor Stachura.