Decisions=Rational Choices or “Predictably Irrational”

[Miguel Duarte Ferreira]

"When we make decisions we think we`re in control, making rational choices. But are we? Entertaining and surprising, Ariely unmasks the subtle but powerful tricks that our minds play on us."

For those who want to understand why although the human being, make decisions in a seemingly irrational and unpredictable, Dan Ariely, has scientifically proved, that after all this apparent irrationalism is expected...

The official link: http://www.predictablyirrational.com

The list of recommended short videos: http://www.predictablyirrational.com/?page_id=7
- Chapter 1: The Truth about Relativity: http://www.predictablyirrational.com/?page_id=151
- Chapter 2: The Fallacy of Supply and Demand: http://www.predictablyirrational.com/?page_id=176
- Chapter 3: The Cost of Zero: http://www.predictablyirrational.com/?page_id=178
- Chapter 4: The Cost of Social Norms: http://www.predictablyirrational.com/?page_id=192
- Chapter 5: The Influence of Arousal: http://www.predictablyirrational.com/?page_id=218
- Chapter 6: The Problem of Procrastination and Self- Control: http://www.predictablyirrational.com/?page_id=219
- Chapter 7: The High Price of Ownership: http://www.predictablyirrational.com/?page_id=328

Dan Ariely Youtube page: http://www.youtube.com/user/danariely

Dan Ariely interview: http://boldapproach.typepad.com/bold/2008/04/predictably-irr.html

I would like to have your comments on how ‘Predictably Irrational’ is related with CI?

[Max Nelson]

If you believe that modeling competitor decision-making and forecasting competitor reaction to current and future market situations is a role for competitive intelligence... then properly understanding human decision-making in organizational contexts (based on objective science and experimentation as opposed to ideological supposition) is a critical foundational tool in our ability to provide actionable knowledge to executives.

Understanding general heuristics and behavioral science norms and placing them within a specific understanding of the individuals within a competitor and the organizational culture of a competitor can help significantly improve the ability to forecast probable competitor response to various environmental changes... which one would think might be a major goal for a Competitive Intelligence function.

Just my $.02 (of course my undergraduate degree from University of Chicago was in Behavioral Science... so my perspective on the utility of the field for CI might be a bit biased...).

Max

[August Jackson]

I agree with your assessment, Max, that behavioral studies is a valuable input into anticipating competitor moves. The McKinsey Quarterly article being discussed in another thread gives a good executive-level advocacy for that very practice.

One of the issues that I've begun to explore is the potential to bring concepts from new books such as Predictably Irrational, Nudge, Blunder and Think Again into the communications practices of intelligence professionals. I know from discussions with fellow CI professionals that there is a shared experience of providing overwhelming evidence of some trend, shift or set of consequences arising from a specific competitor move that have gone unheeded, failed to generate an appropriate sense of urgency or have been outright rejected by the executives and board members we seek to inform.

I know Ellen Naylor's Cooperative Intelligence framework takes some of these issues into consideration from an organizational and political perspective. Those are important components to driving the appropriate action we want to see from our outcome. My guiding question is if there are mechanisms to incorporate into our intelligence deliverables (or even into our analysis) that can overcome our audience's cognitive bias.

Thoughts?