Ori Brafman - Sway: The Irresistible Pull of Irrational Behavior

Contents

Preface
A little house on the Tel Aviv prairie. Asbestos and open-heart surgery. Ignoring the O-ring. Diagnosing the wrong patient. Where psychology and business collide.

Chapter One
ANATOMY of an ACCIDENT
Taking off at Tenerife. The oversensitive egg shoppers. The lure of the flat rate. Would you like insurance with that? So long, Marthas Vineyard.

Chapter Two
The SWAMP of COMMITMENT
Playing not to lose. Fun-n-Gun. Only the Gators walked out alive. The $204 twenty-dollar bill. The end of the Great Society. We dont even know where the tunnel is.

Chapter Three
The HOBBIT and the MISSING LINK
The real-life Indiana Jones. The hunt for the missing link. The Stradivarius on the subway. Whats in a five-cent hot dog, anyway? Homer Simpson and Piltdown Man. Can a discount drink decrease IQ? Shakespeare was wrong. A paleontological lineup.

Chapter Four
MICHAEL JORDAN and the FIRST-DATE INTERVIEW
The curse of the low draft pick. The cold professor. What lovesick college freshmen have in common with HR managers. When a pretty face equals a higher interest rate. The mirror, mirror effect. The Joe Friday solution.

Chapter Five
The BIPOLAR EPIDEMIC and the CHAMELEON EFFECT
A psychiatric outbreak. Sugar pills and Prozac. Tricking Israeli army commanders. How to sound beautiful. How old do you feel? The love bridge.

Chapter Six
In FRANCE, the SUN REVOLVES AROUND the EARTH
Who wants to trick a millionaire? Splitting the pie. Sentimental car dealers. The talking cure for felons and venture capitalists. Russian justice. The rational Machiguenga.

Chapter Seven
COMPENSATION and COCAINE
Switzerlands toxic conundrum. The GMAT rebels. The power of the pleasure center. Hijacking altruism. Fast times at Commie High. The anticipation factor.

Chapter Eight
DISSENTING JUSTICE
The Supreme Court conference. Peer pressure and Coke-bottle glasses. Ferris Bueller and the blocker. We are not focusing on the name you give to potatoes. The captain is not God. Not just thinking out loud. Justice has been served.

Epilogue
Swimming with the riptide. The power of the long view. Zen economics. Propositional thinking. One mans trash is one womans masterpiece. A cable guy, a banker, and a pharmaceutical rep. The real devils advocate.

TO NIRA,
FOR ALWAYS BELIEVING IN US

W hen we were growing up, our mother had two idols she hoped we would try to emulate. The firstand there was really no competition therewas Laura Ingalls of Little House on the Prairie fame. In our moms eyes, she was the picture of perfection. Wed talk back to our mom, and shed sternly ask, Would Laura Ingalls ever talk that way? Wed forget to do our homework, leave dirty dishes in the sink, or generally cause trouble, and Laura Ingalls would travel from the nineteenth-century American prairie to 1980s Tel Aviv and admonish us to get with the program.

The second heroic figure was our moms cousin Reli, a hotshot lawyer who was valedictorian at Harvard Law. In our eyes, too, Reli could walk on water.

Although Ori thought about law school when he was in eleventh grade, neither one of us took up a legal career. But if you count Reli in, we form the Jewish mothers equivalent of the holy trinity: Reli, the lawyer; Rom, the psychologist (well call him a doctor); and Ori, the businessman.

In a way, this book was born from our different paths in life. While Rom was completing his PhD in psychology, Ori was getting his MBA. On day one of business school, expecting to find himself immersed in a sea of finance, economics, and accounting, Ori realized in his first class, with Professor Roberto Fernandez, that this would be no tranquil sea. Fernandez had a voice that could project from here to the moon. He had that larger-than-life aura about him that made you sit on the edge of your seat. I have some news for you, he told the class of eager MBA students that first day. People arent rational. And with that, Fernandez turned on a grainy film, shot in the 1950s, of open-heart surgery. See that white stuff theyre pouring over the guys heart? Fernandez narrated. Its asbestos. People gasped, unsure of how to react.

Im serious, he boomed. Unsurprisingly, the patients administered the asbestos started dying off. But the hospital had continued with the procedure. How often, Fernandez asked the class, do we turn a blind eye to objective information?

Then he shifted gears and passed around copies of a table featuring mechanical engineering data about a synthetic rubber seal called an O-ring. Take a look at this chart, he said. It represents the likelihood of a mechanical failure as temperatures drop. The data showed that at around 32F, the O-ring would lose its pliability and malfunction. None of the students knew where this was going.

It turned out that the O-ring in question was part of the design of the Space Shuttle Challenger. The night before the launch, engineers from the company that had built the O-ring recommended that the launch be delayed because they did not have conclusive proof that it would hold up in the cold weather predicted for the next day. Despite their concerns, however, management decided to proceed with the launch.

As Oris class listened, mesmerized, Fernandez launched into similar stories of irrational behavior: movie executives bullied into hiring an actress who was obviously wrong for the part, a manufacturer that knowingly produced airplane brakes that caught fire, and more.

Fernandezs point was that although most of us think of ourselves as rational, were much more prone to irrational behavior than we realize. It was a point that stayed with Ori long after business school, and it made us realize that our future professions had a lot more in common than we might originally have thought. Fernandez became a regular part of our vocabulary. Referring to someone who was obviously acting irrationally, wed say: This is a total Fernandez situation. And we found such situations everywhere we looked: in our own lives, in stories we read about the missteps of Fortune 500 companies, and in the actions of politicians.