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Firstly, it doesn’t always pay to be logical if everyone else is also being logical. Logic may be a good way to defend and explain a decision, but it is not always a good way to reach one.
when you are buying mass-produced goods, such as toasters, it generally pays to cultivate mainstream tastes. But when choosing things in scarce supplyfn7 it pays to be eccentric.
A good guess which stands up to observation is still science. So is a lucky accident.
Business people and politicians do not quite understand this and tend to evaluate decisions by the rigour of the process that produces them, rather than by the rigour with which you evaluate their consequences.
We should test counterintuitive things – because no one else will.
‘There are two key steps that a mathematician uses. He uses intuition to guess the right problem and the right solution and then logic to prove it.’
the argumentative hypothesisfn5 suggests reason arose in the human brain not to inform our actions and beliefs, but to explain and defend them to others.
The more data you have, the easier it is to find support for some spurious, self-serving narrative. The profusion of data in future will not settle arguments: it will make them worse.
The ‘doorman fallacy’, as I call it, is what happens when your strategy becomes synonymous with cost-saving and efficiency;
Management attention is instead largely directed towards the invention of plausible-sounding efficiency narratives to satisfy financial analysts, many of whom know nothing about the businesses they claim to analyse, beyond what they can read on a spreadsheet.
Why are large commercial organisations adopting this ideological approach to business? That was supposed to be the weakness of communism.
Perhaps people don’t ‘deserve’ to be rewarded for being lucky, but a system that did not ensure the survival of lucky accidents would lose most of its value.
The theory is that free markets are principally about maximising efficiency, but in truth, free markets are not efficient at all.
Truly free markets trade efficiency for market-tested innovation that is heavily reliant on luck. The reason this inefficient process is necessary is because most of the achievements of consumer capitalism were never planned and are explicable only in retrospect, if at all.
In the late Middle Ages, science took a wrong turn and came to the wrongheaded conclusion that alchemy didn’t work.
Later on, economists got their own version of the same depressing idea that nothing can be created or destroyed. ‘There’s no such thing as a free lunch,’ they said.
We don’t value things; we value their meaning. What they are is determined by the laws of physics, but what they mean is determined by the laws of psychology.
This is why marketing doesn’t get any credit in business – when it generates magic, it is more socially acceptable to attribute the resulting success to logistics or cost-control.
One contention in this book is that nearly all really successful businesses, as much as they pretend to be popular for rational reasons, owe most of their success to having stumbled on a psychological magic trick, sometimes unwittingly.
Never forget this: the nature of our attention affects the nature of our experience.
But while it is accepted that physical objects are designed around the evolved human frame, it is not universally accepted that the world is shaped to work with the evolved human brain.
The strongest marketing approach in a business-to-business context comes not from explaining that your product is good, but from sowing fear, uncertainty and doubt (now commonly abbreviated as FUD) around the available alternatives.
Cooperation is impossible unless a mechanism is in place to prevent deception and cheating; some degree of efficiency often needs to be sacrificed in order to convey trustworthiness or to build a reputation.
Medieval guilds existed for this reason. Trust is always more difficult to gain in cities because of the anonymity they afford, and guilds help to offset this problem.
Unlike short-term expediency, long-term self-interest, as the evolutionary biologist Robert Trivers has shown, often leads to behaviours that are indistinguishable from mutually beneficial cooperation.
Clay Shirky has even described social capital as ‘the shadow of the future at a societal scale’.
it is only by deviating from a narrow, short-term self-interest that we can generate anything more than cheap talk.
It is therefore impossible to generate trust, affection, respect, reputation, status, loyalty, generosity or sexual opportunity by simply pursuing the dictates of rational economic theory.
Male strippers dress as firemen, not accountants; bravery is sexy, b...
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the main factor which influences human price perception in shops is not, bizarrely, the actual prices charged, but the degree of opulence with which the store is fitted out.
The advertisements which bees find useful are flowers – and if you think about it, a flower is simply a weed with an advertising budget.
Costly signalling theory, which was first proposed by the evolutionary biologist Amotz Zahavi, is, I believe, one of the most important theories in the social sciences.
a quality that starts off being prized as a useful proxy for fitness becomes exaggerated to an absurd degree, a process sometimes known as Fisherian runaway selection. In animals this can be extraordinarily wasteful.
once you understand unconscious motivation, the widespread conviction that humans could be content to live without competing for status in an egalitarian state is nice in theory, but psychologically implausible.
the theory of sexual selection was a truly extraordinary, outside-the-box idea, and it still is; once you understand it, a whole host of behaviours that were previously baffling or seemingly irrational suddenly make perfect sense.
Early aircraft were insanely dangerous. Early washing machines were unreliable. The appeal of these products was based on their status as much as their utility.
as Geoffrey Miller says, might sexual selection provide the ‘early stage funding’ for nature’s best experiments?
Even Darwin’s great contemporary and collaborator Wallace hated the idea of sexual selection; for some reason, it sits in the category of ideas that most people – and especially intellectuals – simply do not want to believe.
This explains why it is necessary for markets to endure the apparent inefficiency of supporting different and competing products with expensively differentiated identities, in order to reward quality control and innovation.
if you talk to economists, they tend to hate advertising and barely understand it at all, while if you talk to biologists they understand it perfectly.
It is impossible to buy expensive aspirin in the UK, yet it is a waste of this wonder drug to sell it for 79p in drab packaging, when you could make it much better by packaging it lavishly, colouring the pills redfn1 and charging more.
As an interesting thought experiment, I often construct fake advertising slogans for various products – in particular the slogans that they would adopt if they could afford to be completely honest about why people bought them. ‘Flowers – the inexpensive alternative to prostitution’ – that kind of thing.
I once attended a presentation on the worldwide beauty industry, which includes clothing, perfume and cosmetics. I was briefly confused by a chart that showed billions of US dollars as its scale but which listed annual spending figures in thousands, before realising that the annual expenditure we were discussing ran into trillions of US dollars. It turns out that more is spent on female beauty than on education.
My contention is that placebos need to be slightly absurd to work.fn1 All three elements that seem to make Red Bull such a potent mental hackfn2 make no sense from a logical point of view. People want cheap, abundant and nice-tasting drinks, surely? And yet the success of Red Bull proves that they don’t.
