Ask Ariely: On Risky Questionnaires, Great Expectations, and Victims of Piracy

May 23

Here’s my Q&A column from the WSJ this week  and if you have any questions for me, you can tweet them to @danariely with the hashtag #askariely, post a comment on my Ask Ariely Facebook page, or email them to AskAriely@wsj.com.

This week, in celebration of my new book Irrationally Yours (which is based on this column), I’d like to share some feedback that I received from a reader. Please enjoy the video.

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Dear Dan,

I am ready to start investing for my retirement, but I’m struggling with those risk questionnaires. I’m not sure that I really know any of the answers. The results show that I’m somewhat conservative, but I don’t trust their conclusions. Any advice? 

—Rick

Deciding how much risk to stomach in your investment plans is a huge decision that will have a major impact on your savings and ability to retire. AND I don’t think you should base that big decision on your response to some risk-assessment questionnaire. The questions in most of these risk-attitude-assessment tools are about feelings, but you should focus on how much money you’ll need to retire and the quality of life you would have under different investment scenarios. Let’s just assume that you hate the feeling of losing. So what? Should we doom you to a life of poverty just because you feel bad when you lose money? My advice: Figure out how your life might look like with various investment approaches, figure out which tradeoffs you are (and aren’t) willing to make and plan your investments accordingly. Meanwhile, you can deal with your fear of risk directly. Learn yoga, meditate, take some medication, avoid looking at your portfolio more than twice a year—do whatever you need to deal with your emotions, but make sure that doesn’t interfere with the way you decide to invest.

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Dear Dan,

The other day, I ordered a new drink, a “London Fog tea latte,” at a local café. It arrived on the counter in a porcelain teacup with a saucer, and four lavender seeds were arranged in a fleur-de-lis at the center of the froth. The barista gave me a bestowing nod. It was the best tea latte I’d ever tasted; I found myself saying “Mmm” before the cup even reached my lips. Do our expectations actually affect how things taste to us? 

—Chelsea 

For sure. In an experiment we conducted about ten years ago at MIT, we gave the students two small beer samples and asked them to pick the one they wanted a full glass of. One sample was just plain beer, but the other sample was a regular beer plus some balsamic vinegar. We didn’t tell some students about the special ingredient, and they liked the beer with the dark additive. But when we told our tasters about the vinegar, their expectations kicked in; they expected to hate it and sure enough, they did. Such results show that expectations do indeed change what we like. More important, they show us that expectations are a fascinating interplay between our brain and our mind. We are always trying to predict the future and prepare for it. As our body changes to accommodate to the anticipated experience, it also makes those anticipations more likely to materialize. This is why expectations can change our actual experience—and why we should embrace them as much as we can. (My next answer, by the way, is going to be particularly insightful. Wait 30 seconds, and read on.)

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Dear Dan,

My nephew has been downloading music and movies illegally from the Internet. How can I get him to respect intellectual-property rights without sounding self-righteous? 

—Patricia 

My own view on illegal downloads was deeply modified the day that my book on dishonesty was published—when I learned that it had been illegally downloaded more than 20,000 times from one website. (The irony did not escape me.) My advice? Get your nephew to create something and then, without him knowing, put it online and download it many, many times. I suspect that will make it much harder for him to keep up his blithe attitude toward piracy.

See the original article in the Wall Street Journal here.

Irrationally Yours is out TODAY!

May 19

My new book Irrationally Yours, based on my “Ask Ariely” column in the Wall Street Journal, comes out today.

In this video, I offer advice to passersby on everything ranging from commuting to work to a trip around the world.

Irrationally Yours,

Dan Ariely

Irrationally Yours is published today!

May 18

Dear Friends,

My new book — Irrationally Yours is out today.  The book is based on my “Ask Ariely” column with some amazing cartoons by William Haefeli.

Here is a sample of what you might learn from the book…..

  • What can you do to stay calm when you’re playing the volatile stock market?
  • What’s the best way to get someone to stop smoking?
  • How can you maximize the return on your investment at an all-you-can-eat buffet?
  • Is it possible to put a price on the human soul?
  • Can you ever rationally justify spending thousands of dollars on a Rolex?

And here are some extra kind words from a few individuals:

With 70% of his body burned, 3 years in hospital, and decades of experiments in social science, Dan views life from a unique perspective. In this thoroughly entertaining book Dan providing insightful advice to a vast range of human problems. I loved it.

Terry Jones, Monty Python member, director, actor and writer

 

Ariely is a master observer of human foibles. His advice is funny, thoughtful, and well-founded. Sometimes all three together. My advice: read it, enjoy it, think about it.

Al Roth, Craig and Susan McCaw Professor of Economics at Stanford University, Nobel laureate in Economics.

 

From advice on relationships to insight on superstitions, Ask Ariely is as informative as it is witty. I really enjoyed reading it.

Dr. Ruth K. Westheimer, Sex Therapist

 

The human brain is one of the largest mysteries in the world. Trying to understand its complexities and improve our behavior is one of the main challenges society deals with. In Irrationally Yours, Dan shares with us some of these mysteries and the tools for accomplishing this task.

Anthony “Tony” Robbins, life coach. Author of Unlimited Power, Unleash the Power Within and Awaken the Giant Within.

 

Dan is the most provocative, interesting, and to-the-point advice columnist you are likely to read, whether on your job, your love life, your kids or your disrespectful neighbors.

Tyler Cowen, Holbert L. Harris Professor of Economics at George Mason University, Author of Average Is Over and blogger at marginalrevolution.com

 

There is nobody better placed to solve your problems than Dan Ariely. A master of both rationality and irrationality, he’s wise enough to know which to recommend in any situation. A funny, addictive, life-changing book.

Tim Harford, author of The Undercover Economist Strikes Back

 

And here are a few links:

Amazon: http://bit.ly/1yIGKcx

B&N: http://bit.ly/1GZ2oz1

Indiebound: http://bit.ly/1Jt1Wa8

iBooks: http://bit.ly/18k0Q3b

Books-a-Million: http://bit.ly/1yIGOcg

Reader Response: Day 9

May 18

This reader was inspired to pursue her dreams after reading Irrationally Yours. Hear her story below:

Irrationally Yours,

Dan Ariely

Reader Response: Day 8

May 17

Here’s eight!

To see the entire collection of Reader Responses for Irrationally Yours, check out this album.

Irrationally Yours,

Dan Ariely

Reader Response: Day 7

May 16

In this video, Day 7 in the Reader Response series, a reader explains how Irrationally Yours helped her become a better decision maker.

Irrationally Yours,

Dan Ariely

Reader Response: Day 6

May 15

Yet another!

Check out all the Reader Responses in this album.

Irrationally Yours,

Dan Ariely

Reader Response: Day 5

May 14

This just in: Critics are calling Irrationally Yours the best behavioral economics book to come out this May!

Hear what one reader has to say below.

Irrationally Yours,

Dan Ariely

Reader Response: Day 4

May 13

Enjoy this video review from another loyal reader.

Irrationally Yours,

Dan Ariely

Reader Response: Day 3

May 12

Third in the Reader Response series, see what this generous reader has to say about my upcoming book Irrationally Yours.

Irrationally Yours,

Dan Ariely

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