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Dan Ariely, The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home: Painless behavioral economics book exploring how we don’t behave like rational actors in the classic economic model—we seek revenge against those who have harmed us even when that is costly. Ariely talks about his history of recovering from extensive burns and experiencing continuing pain, and unfortunately chooses sexist jokes over real science when he talks about pain: in grad school, he did an experiment showing that men would keep their hands in extremely hot water for longer than women would while he was timing them. When he brought these results to his professor, a women, she told him that he hadn’t proven that men had a higher pain threshold, but that men were more foolish, and that if the stakes had been more serious he would have seen different results. He reiterates his conclusion and says, “I learned a lot about women that day.” No, he (should have) learned about the scientific method: the alternative hypothesis that men and women value “being able to keep hand in hot water” differently, perhaps because they differ in their response to being under observation, was another perfectly plausible explanation. More data were required, and he probably knows that, but still couldn’t resist the cheap joke.
In another oddity, Ariely has the bizarre idea that it’s unfair to punish a principal for acts of an agent: getting mad at the Gap, for example, because a Gap salesperson treats you badly. Now, it’s not right to take a sweater from the Gap because you’re mad at the salesperson, but the rule that principals are responsible for the acts of agents within the scope of their employment is foundational to the modern economy, and rightly so: if a Ford employee leaves out a key part when putting together my car and my car crashes, my remedy is against Ford, not against the likely impecunious employee. This rule encourages Ford to monitor its employees and to spread the costs of any mistakes. A contrary rule would require a lot more explanation, but Ariely is puzzled by why we’d attribute an agent’s misfeasance to his/her employer, which leads to a weird emphasis in the chapter about how our emotions contaminate logically unrelated transactions—an interesting topic in itself, since when we yell at our kids because our boss was mean we really are aiming in the wrong direction.
Wendell Potter, Deadly Spin: : An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans: Yeah, not so much. There’s a lot of generality about misleadingness, along with a history of PR, but nothing that really goes deep or explains more than you already know: health insurers are trying to terrify people with health insurance into opposing any limits on what insurers can do or charge, while at the same time they deny treatment to the actually sick.
Linda Babcock & Sara Laschever, Ask for It: How Women Can Use the Power of Negotiation to Get What They Really Want: Interesting, practical guide to getting more out of negotiations, including convincing yourself to negotiate in the first place. Women too often assume that we’ll get what we deserve, which means we get a lot less than men do, because men ask for more. Small initial differences add up into huge gaps over time. And still I feel like I have an awful lot—but I’m trying to figure out what I should be asking for, just to see if I can get it.
Gary Rivkin, Broke, USA : From Pawnshops to Poverty, Inc. -- How the Working Poor Became Big Business : Depressing history of the “poverty industry,” ensuring that the poor pay more in every way, from subprime mortgages to payday lending. Rivkin talks to a lot of people who work in the industry, and work to constrain it. The most interesting parts are about the people trying to do “ethical” lending—charging a small risk premium over prime for underbanked borrowers, and generally doing pretty well for themselves and for their customers, except that their example showed the big banks that there was a ton of money to be made in subprime. There’s a note of hope in the end, which ends with the creation of the new Consumer Financial Product Safety Commission, but the story is far from over.
In another oddity, Ariely has the bizarre idea that it’s unfair to punish a principal for acts of an agent: getting mad at the Gap, for example, because a Gap salesperson treats you badly. Now, it’s not right to take a sweater from the Gap because you’re mad at the salesperson, but the rule that principals are responsible for the acts of agents within the scope of their employment is foundational to the modern economy, and rightly so: if a Ford employee leaves out a key part when putting together my car and my car crashes, my remedy is against Ford, not against the likely impecunious employee. This rule encourages Ford to monitor its employees and to spread the costs of any mistakes. A contrary rule would require a lot more explanation, but Ariely is puzzled by why we’d attribute an agent’s misfeasance to his/her employer, which leads to a weird emphasis in the chapter about how our emotions contaminate logically unrelated transactions—an interesting topic in itself, since when we yell at our kids because our boss was mean we really are aiming in the wrong direction.
Wendell Potter, Deadly Spin: : An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans: Yeah, not so much. There’s a lot of generality about misleadingness, along with a history of PR, but nothing that really goes deep or explains more than you already know: health insurers are trying to terrify people with health insurance into opposing any limits on what insurers can do or charge, while at the same time they deny treatment to the actually sick.
Linda Babcock & Sara Laschever, Ask for It: How Women Can Use the Power of Negotiation to Get What They Really Want: Interesting, practical guide to getting more out of negotiations, including convincing yourself to negotiate in the first place. Women too often assume that we’ll get what we deserve, which means we get a lot less than men do, because men ask for more. Small initial differences add up into huge gaps over time. And still I feel like I have an awful lot—but I’m trying to figure out what I should be asking for, just to see if I can get it.
Gary Rivkin, Broke, USA : From Pawnshops to Poverty, Inc. -- How the Working Poor Became Big Business : Depressing history of the “poverty industry,” ensuring that the poor pay more in every way, from subprime mortgages to payday lending. Rivkin talks to a lot of people who work in the industry, and work to constrain it. The most interesting parts are about the people trying to do “ethical” lending—charging a small risk premium over prime for underbanked borrowers, and generally doing pretty well for themselves and for their customers, except that their example showed the big banks that there was a ton of money to be made in subprime. There’s a note of hope in the end, which ends with the creation of the new Consumer Financial Product Safety Commission, but the story is far from over.