The authors did a great job keeping the readers interested throughout the book telling lots of good stories to explain all the irrational behaviors of people, who include the regular people to the brightest. In a way, this book is a lot like the Freakinomics, but they are not like micro-economic problems which often have to do with irrational behavior of consumers.

The reasons are as follows:
Loss Aversion (with commitment): We often ignore logic when we are committed to a course, like what the exemplary pilot of KLM Flight #4805, Jacob van Zanten, who took off the 747 plane without the clearance from the tower, resulted in the deaths of over 583 people. This was all because he needed to keep his on-schedule reputation. Other examples include: asymmetry of supply-demand curve of eggs sale, flat monthly fee for mobile phones, loss damage waiver in car rental, traditional football game “war of attrition” strategy, Professor Bazerman’s $20 bidding contest, Lyndon Johnson’s (LBJ’s) Vietnam war strategy, George W. Bush’s Iraq strategy,

Value Attribution: Our tendency to imbue someone or something with certain qualities based on perceived value, rather than on objective data. Dr. Dubois’s, an anthropologist, discovered Homo Erectus on the islands of Java Sea. He was dismissed in the beginning due to a previously held belief that he was a virtual no-name . Other examples: Joshua Bell’s subway performance in NY, Nathan Handwerker’s hot dog stand with recruited doctors customers, Charles Dawson’s Piltdown Man scandal, experiment with people with full-price season pass enjoyed more than discounted season pass.

Diagnosis bias: We use diagnostic labels to organize and simplify. Once you get a label in mind, you don’t notice things don’t fit within the categories that do not make a difference. For examples, NBA’s draft order, MIT experiment of a “warm” and “cold” label of a substitute professor, job interviews. 3 mistakes we make: 1. dismissal of facts (like interview questions), 2. focus on irrelevant factors (ads with a smiling woman), 3. Chameleon effect (when we brand or label people, they take on the characteristics ascribed to them).

Belief in fairness and its process (procedural justice) and the need to be heard: Examples, French’s “Who wants to be a Millionaire” audience, money splitter experiment, car purchase (how the customers are treated), criminals’ perception of how they’re being treated in the justice system, how the venture capitalists are being treated by the CEO’s.

Pleasure vs. Altruistic: We have two “engines” running in our brains that can’t operate simultaneously. “We can approach a task either altruistically or from a self-interested perspective. The two different engines run on different fuels and also need different amounts of those fuels to fire up.” For example, Community High School teachers reactions to bonus incentive for increasing attendance.

To reduce/avoid the Sway:
1. Dissenting votes: Sway of group conformity is incredibly strong but the existence of dissenting votes help to balance its power. For example, the dissenting vote in the Supreme Court, France’s UN vote against Iraq invasion. Airlines’ use of CRM (Crew Resource Management) help group members to be effective blockers.
2. Take a long view to avoid succumbing to short-term commitment and let go of the past, like in traffic woe, and investment strategy.
3. Employ “Personal Construct Theory”: To remain flexible and examine things from different perspectives. Have a “waiting period” before making a diagnostic judgment.
4. To avoid fairness sway, weigh things objectively and not succumb to emotional maneuvers or moral judgment. Ask yourself, “Would I rather achieve my goals or teach the other person a lesson?”
5. Keeping others appraised of the decision making process help make the process perceived to be fair.

This is an excellent book with lots of good concrete stories/experiments explaining why we human commit irrational behaviors. They are what make us humans and what make us err as humans. The pitfalls could hurt our pocket books and even kill us. Good to know what they are.