No, I did not win any of the door prizes. Particularly not the coveted free ice skating lessons that drew a murmur of excitement from the business breakfast crowd in the Omni’s conference room. We were there this morning to launch this year’s Virginia Festival of the Book with scrambled eggs and a presentation by Dan Ariely, the Duke/MIT professor and author of Predictably Irrational: The Hidden Forces That Shape Our Decisions. After sympathetically noting the conflict of interest between a 7:30AM meeting on March 18 and an alcohol-fueled Irish holiday on March 17, Ariely gave a talk similar to this one in which he unraveled the mysteries of behavioral economics, aka the science behind buying a $4 cup of coffee or preferring specialty beer.
Last fall Fortune Magazine described Ariely as one of “10 new gurus you should know.” They like him because he applies statistical science to consumer behavior and helps companies save money on things like insurance claims and clothing returns. I like him because he’s one of the few men who realize that jeans qualify as business pants and because he’s a riveting speaker.
Whenever I encounter someone of above-normal intelligence, my first thought is always, “Let’s get this guy to Washington ASAP. He and Obama need to do lunch.” I imagine the first half of these meetings of the minds will be devoted to discussing how clever a matchmaker I am; the second half to policy decisions. And sure enough, Ariely has sage advice for the president. When asked about the outrageous AIG bonuses, Ariely said that he’s against capping bonuses in the future; instead, the CEOs should get nothing. They’re likely to do a better job for zero dollars than for $500,000. He said it’s like when you ask someone to help you move furniture for an hour. The friend volunteers out of the goodness of his heart, but the minute you offer to pay him some paltry amount like $5 (the equivalent of half a million for Mr. AIG), it’s demotivating. The person thinks, “My time is worth at least $20 an hour.” When market forces enter into the equation, the social incentive vanishes. Which is why I pay everybody in pizza. Speaking of which, if we paid the IRS in pizza instead of dollars, people would be more likely to cheat on their taxes. The further removed the commodity is from actual money, Ariely says, the more likely we are to justify fudging the numbers (or slices in this case).
By the way, I have been up learning interesting things for four hours, so I think that buys me precisely six hours of naptime and watching television on the internet.