Mike Kueber's Blog

July 3, 2012

Saturday Night at the Movies #36 – Enemy at the Gates – and Sunday Book Review #79 – Predictably Irrational by Dan Ariely

Filed under: Uncategorized — Mike Kueber @ 2:05 am
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Enemy at the Gates is a 2001 war movie whose title is taken from a non-fiction book that described the Battle of Stalingrad in 1942-1943.  It stars Jude Law (Russian) and Ed Harris (German) as dueling snipers, and although some of the story has a factual basis, most of it is fictionalized.  (That reminds me that I need to read “American Sniper,” a recent best-seller.)  The movie received mixed Rotten Tomato reviews (54%), but the audience liked it (81%).  I agree with the audience and give it three stars out of four.  The war scenes seemed authentic, and it was interesting seeing a war movie where I wasn’t rooting for one side vs. the other.  Some have criticized Rachel Weisz’s romance with Law as gratuitous to the story, and that point is well taken.

Predictably Irrational is a compendium of poor decision-making by Americans.  The author Dan Ariely is a behavioral economist, and he delights in proving how we continually make economic decisions that defy reason.  Although he exaggerates the extent that we are irrational, he is correct in pointing out that being aware of the following irrational tendencies will enable us to minimalize them even further: 

  • The truth about relativity.  It’s hard to compare apples to oranges, so most people are inclined to choose a product that has competition, albeit inferior competition.  Also, most of us in San Antonio don’t care so much about how our salary compares to the salary of people in NYC, but if we hear about a neighbor, co-worker, or relative who is making more than we are, we can easily get exercised.  The author suggests we avoid this problem by moving toward smaller circles – i.e., don’t spend time being exposed to people who talk about how much money they make; don’t hang out with materialistic people who obsess about expensive cars; don’t go to a Parade of Homes that cost millions of dollars.  That makes sense.    
  • The fallacy of supply & demand.  Most people don’t have much opinion about the proper price for something until they have the price on a comparable item.  By creating or controlling the so-called anchor prices, marketers can easily manipulate our purchasing decisions.  From my personal experience, I will be inclined to buy a pair of sneakers on sale for $50 if the MSRP is $120 instead of a pair on sale for $40 with an MSRP of $60, but I question whether this is irrational.
  • The cost of zero cost.  Something about the word “free” causes people to disregard all other considerations.
  • The cost of social norms.  There are certain situations, such as dating or family outings, where consideration of costs is taboo.
  • The influence of arousal.  This chapter could be summarized by Robin Williams’ joke about the human heart having the capacity to adequately supply blood to the brain and penis, but only one at a time.  An aroused man (or woman) does not think clearly.
  • The problem of procrastination and self-control.  All too often we give up our long-term goals for immediate gratification, but there are techniques that can  encourage the necessary will-power and discipline. 
  • The high price of ownership.  People how have something typically place a greater value on something than those who want to own it.  An excellent example involved scores of kids who won Duke basketball tickets in a lottery and then wanted an average of $1,400 to sell their tickets, while the scores of kids who didn’t win the ticket lottery were only willing to pay $175 for them.
  • Keeping doors open.  People put a lot of effort into keeping options even though they would be better off eliminating those options that really aren’t needed.
  • The effect of expectations.  The placebo concept on steroids.
  • The power of price.  Something that costs a lot must be better than something inexpensive.
  • The context of our character.  Robberies in America cost $500 million a year; employee theft and fraud costs $600 billion a year.  For some reason, Americans are much more amenable to white-collar crime than taking money directly from its owner.
  • Beer and free lunches.  The author concludes by suggesting that “we are pawns in a game whose forces we largely fail to comprehend.”  But the good news is that our “mistakes also provide the opportunity for improvement.  If we all make systematic mistakes in our decisions, then why not develop new strategies, tools, and methods to help us make better decisions and improve our overall well-being?”

Hear, hear.


1 Comment »

  1. […] History.”  I decided to read this movie after being fascinated by the three-star sniper movie “Enemy at the Gates,” and American Sniper didn’t […]

    Pingback by Sunday Book Review #81 – American Sniper by Chris Kyle « Mike Kueber's Blog — August 13, 2012 @ 5:17 am | Reply

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