Dan Ariely
Dan Ariely
Dan Arielyis the James B. Duke Professor of Psychology and Behavioral Economics. He teaches at Duke University and is the founder of The Center for Advanced Hindsight and also the co-founder of BEworks. Ariely's talks on TED have been watched over 7.8 million times. He is the author of Predictably Irrational and The Upside of Irrationality, both of which became New York Times best sellers, as well as The Honest Truth about Dishonesty...
NationalityIsraeli
ProfessionEconomist
Date of Birth29 April 1967
CountryIsrael
If you have loans, the first thing you want to do is say, "Okay, look I have a credit card, if I really need to borrow, I have this emergency money that I can get, but for now there is no reason for me to keep cash at zero percent interest rate and at the same time, pay all of this money out. So, I think people need to figure out quickly how to pay loans and how much cash they should really keep.
Imagine you have six loans, small to huge. People want to close loans and because of that, they try to pay off the small loans, but that's not the right strategy. The right strategy, of course, is to pay the loan with the highest interest rate. People make this mistake and it costs them lots and lots of money, it's a very expensive mistake because interest rates accumulate and become very, very expensive very quickly.
I always found the appeal to the market gods a bit odd. Why would the market fix mistakes instead of aggravating them?
We need to believe that we're good people, and we'll do just about anything to maintain that perception.
That’s a lesson we can all learn: the more we have, the more we want. And the only cure is to break the cycle of relativity.
We have very strong intuitions about all kinds of things — our own ability, how the economy works, how we should pay school teachers. But unless we start testing those intuitions, we’re not going to do better.
The more cashless our society becomes, the more our moral compass slips.
Thinking is difficult and sometimes unpleasant.
If you ever go bar hopping, who do you want to take with you? You want a slightly uglier version of yourself. Similar ... but slightly uglier.
The companies that provide debt, what do you think their goal is? Is their goal for you to fully understand the cost of your debt? No. So they're basically creating these approaches to make you feel like it is incredibly cheap or just to think about the cost per day rather the cost per year or cost for a lifetime. So debt is very simple mistake.
It is helpful to think of people as having two fundamental motivations: the desire to see ourselves as honest, good people, and the desire to gain the benefits that come from cheating - on our taxes or on the football field.
When you're in pain, tomorrow doesn't exist - just the pain - and the only thing that you want in the world is for it to go away.
Believing you are a bad person leads to a slippery slope.
Scaling down individually is very hard. Imagine that if you go to a place where everybody is dressed nicely, and you are the only one who doesn't dress nicely. Everybody goes on vacations to a great place and you go to the Jersey shore. It's very hard to do these things without an organized mechanism, but it looks to me like there might be some organized mechanisms.