Sway: The Irresistible Pull of Irrational Behavior

Two University of Zurich researchers were equally curious: The Swiss nuclear incentive study, titled “The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out,” was conducted by Bruno S. Frey and Felix Oberholzer-Gee. It was published in the American Economic Review 87 (1997): 746–55. forty students sat with number 2 pencils:

Professor Daniel Putler, a former researcher at the U.S. Department of Agriculture, has spent more time thinking about eggs in a year than the rest of us spend in a lifetime. He carefully tracked and studied every aspect of egg sales in southern California. Looking at the data, he found some interesting patterns. Egg sales, for instance, were typic

workplace, read “Determinants of Perceived Fairness of Performance Evaluations,” by Jerald Greenberg, published in the Journal of Applied Psychology 71 (1986): 340–42. You can also read “Effects of Procedural and Distributive Justice on Reactions to Pay Raise Decisions,” by Robert Folger and Mary Konovsky, published in the Academy of Management Jou

http://www.foreignpolicy.com/story/cms.php?story_id=3660.

Sitting in their plush offices, venture capitalists: The venture capitalist study, titled “Procedural Justice in Entrepreneur-Investor Relations,” is by Harry Sapienza and M. Audrey Korsgaard. It was published in the Academy of Management Journal 39 (1996): 544–74.

If anyone knows about having a lot on the line, it’s Jordan Walters of the Silicon Valley branch of the investment house Smith Barney. Jordan is exactly the kind of person you’d look for in a financial planner: he’s calm, he’s thoughtful, and he always takes the time to listen. As we sat down in his office and sipped from the minibar-sized can of a

When you think of car dealers: “The Effects of Supplier Fairness on Vulnerable Resellers” was written by Nirmalya Kumar, Lisa Scheer, and Jan-Benedict Steenkamp. It was published in the Journal of Marketing Research 32 (1995): 54–65.

We experience the pain associated with a loss much more vividly than we do the joy of experiencing a gain. Sensing a loss as a result of the high price, the shoppers can’t help but put the carton back on the shelf. And it’s not only egg buyers who are affected by the pain of a loss. A group of researchers replicated Putler’s study among orange juic

As Columbia Business School professor Eric Johnson explained to us, the more meaningful a potential loss is, the more loss averse we become. In other words, the more there is on the line, the easier it is to get swept into an irrational decision.