18 Jun The best ways to buy happiness…
Behavioral economist Dan Ariely made a big splash with his first book, Predictably Irrational. He_ã_s now released a new book called The Upside of Irrationality. Jill Schlesinger talks with the behavioral economist about big Wall Street bonuses, the best ways to buy happiness, and the social value of revenge. What follows is an edited transcript of that conversation.
How is this different from your previous book?
The first book was basically about the psychology of money and how consumers think about money and decisions about money. This book has two parts: The first one is mistakes you make in the workplace, and the second is about mistakes you make in your personal life.
It_ã_s also very different for me because it_ã_s a very personal book. So the second half, I really kind of draw on my own life, my accident, how it made me think differently and I think I got to be a bit more courageous and open. I talk about my own life. And because of that, I also care much more about how people think about this book.
Let_ã_s talk about the workplace. You discover that actually, paying for performance via bonuses doesn_ã_t quite work the way Wall Street told us it would.
Can you explain that?
It_ã_s actually very simple. People have this very simple intuition: They say more money would lead to higher motivation, and then would lead to higher performance. And it turns out, that_ã_s correct, for very simple tasks.
So if I ask you, for example, to jump. I say, I_ã_ll pay you $1,000 per jump that you make in the next 24 hours, vs. a dollar _ã” you would jump much more for $1,000. But if I ask you to think, to be creative, thoughtful, use your memory, any cognitive capacity _ã” it turns out the relationship is not like that. And you try more, you succeed more, but sometimes you try more and you actually succeed less.
The intuitive way to understand this is: Imagine I told you I_ã_d give you $100,000 to be funny in the next 10 minutes. How much of your next 10 minutes will you be able to be funny? Or will you basically panic because you_ã_re not making it?
Interested in reading more about the complext relationship between money and happiness? Just click here