Well, it turns out that this difference depends on whether a citizen is asked to check the box to participate in the organ donation program, or to check the box NOT to participate in the program - whether it is an opt-in or opt-out choice, in other words. Ariely says it's not that people don't care about this rather morbid decision, but that they care a LOT about it, and yet they don't really know what to do. So, we are paralyzed with indecision and we end up electing not to make any change over whatever was provided to us.

He had a couple of examples of how providing extra choice to a customer will actually depress the customer's propensity to buy. A display of 24 jams versus a display of 6 jams at a trade show was one of his examples. The 24-jam display generated many more views (that is, people stopping by the stand to take a look), and about the same number of sampling tries. However, while 30% of the visitors to the 6-jam stand ended up buying at least one of the jams, only 3% of the visitors to the 24-jam stand did. This is, of course, a well known principle from direct marketing, that providing choice in an offer to a customer will decrease their likelihood of accepting the offer.

And there are other irrationalities we all suffer from. Imagine I ask you try to write down three reasons you love your partner, while I ask someone else has to write down ten reasons why they lover their partner. Who, after this exercise, is more likely to rate their overall "love" for their partners higher, on a scale of 1 to 10? This is one of the posers Ariely gave us, and I guessed that the person who spent the time reviewing ten reasons would naturally be predisposed to rate their love for their partner more highly. But I was wrong. According to Ariely, apparently it's just difficult to think up ten separate reasons to love someone, and when you start to run out of reasons and to have to think hard about just why DO you love this person, you begin to doubt your love! So the ten-reason respondent will rate his or her love for their partner lower than the three-reason person!

Then of course there is the bias introduced by comparison. Ariely showed a subscription offer for the Economist magazine. Which offer would you likely choose, if the options were $59 for an online-only subscription, $125 for a print subscription, or $125 for print and online together. The existence of the middle offer, while it looks worthless and no one will choose it, actually has a great deal of influence on which of the other offers is chosen - and overwhelmingly more people will choose the $125 option when presented with these THREE choices rather than when they are presented only with the first and last one.

Ariely also has some interesting things to say about cheating, a subject he became fascinated with following the Enron scandal. His behavioral economics experiments show in general that lots of people will cheat, but they mostly only will cheat a little bit, not too much - and this holds whether the stakes are very high or very low. So maybe two things are going on, he suggests: We want to feel good about ourselves, but we want to benefit also from the cheating. Even if it's just a little bit of money, it's a competitive triumph. However, if you remind people at the right moment (i.e., just before the opportunity to cheat) about their honor code or their religious principles, then you get much less cheating.

For me, Ariely's deepest insight on the topic of cheating is that simply putting people in a conflict of interest seems to give them permission to cheat in a variety of ways. A stock market analyst can bias his recommendation by slightly changing his opinion, if the stock is being recommended by his firm. A banker can cheat slightly just by rationalizing a complicated and difficult to understand financial derivative and recommending it to a client. A politician can cheat just a bit by persuading himself that the bill being sought by his high-contributor supporter really is the right policy. This is a BIG insight, I think.

And one more thought worth repeating from this marvelous presentation: We can only test our intuition against these irrationalities by testing the negative hypothesis. This rang true to me because it is exactly the same message as I just read in The Drunkard's Walk, regarding how to test whether our judgment has been random or not. Suppose, for instance, that you think you are pretty good at hiring the right person. You do the interviews, then you make your decision. It's always a judgment call, but on balance you're reasonably confident in your own capability to pick good people. Ariely says, the only way to test this assumption on your part (that you're competent to do good hiring) is to purposely hire someone you really don't think would work out, and then see if you are correct or not.

By the way, he says, that's how the Israeli Air Force hires its pilots. Every so often they purposely hire people who don't fit the profile, and if they wash out as expected, then they are of course writing off the tens of thousands of dollars in training they just wasted on them. But if someone the didn't think would work out actually DOES work out, then they go back to their selection mechanisms to see why they screened this good candidate out mistakenly in the beginning.

On the whole, and EXCELLENT presentation!