Book Review: “Sway: The Irresistible Pull of Irrational Behavior “, Ori Brafman and Rom Brafman

Sway: The Irresistible Pull of Irrational Behavior

By Ori Brafman and Rom Brafman

Reviewed by David L. Perkins, Jr.

Ever said to yourself, "Why in the world did I do that?" Of course you have. After all, as Roman Catholic Cardinal Melchior De Polignac declared, "Errare humanum est (to err is human)."

But why do we behave in ways contrary to our own self-interest? Why, when we place so much pride in our ability to be rational and prudent, do we at times behave with such irrationality?

Why does a billionaire oil executive and commodities trader double down on trading losses again and again until all is lost? Why do NASA scientists ignore data that clearly show O-rings fail?

According to the Brafman brothers - as described in the book - we simply fall prey to one of a handful of "psychological forces that derail rational thinking." The promise of the book is that, if we can become aware of them, we might be better able to avoid falling victim. And so Sway is filled with incredible stories about smart and successful people that, the Brafman brothers contend, fell victim to one of the "sways" ... with disastrous consequences. I suggest that you pick up a copy. It's a fascinating read that just might help you avoid disaster.

Sways That Derail Rational Thinking

Diagnosis Bias: We make hasty judgments about people and things based on limited, subjective information, and then holding too tightly to our judgments (though they were formed from weak and/or incomplete data), accepting only information that conforms to our established views. Diagnosis bias is powerful and prevents evaluating new information objectively. When we label people, they tend to take on the characteristics of our "diagnosis" (the chameleon effect). The solution is to be open to new facts and ideas.

Commitment Bias: Irrational loyalty to an old strategy that was previously successful (staying the course) is not in our best interest. Some catastrophic airplane crashes have been the result of pilots' commitment bias. They focus on on-time arrivals and departures, ignoring warning signs and safety factors. Businesses fall prey to confirmation bias, too. But they need to step back from projects and ask, "If I were just arriving on the scene and reviewed the facts, is this solution the rational one?"

Loss Aversion: We go to great lengths to avoid loss. Sometimes our desire to avoid loss causes us to act irrationally. Car rental companies prey on this by getting us to buy additional "damage waiver" insurance. Phone companies try to get us to accept flat-fee service to avoid the risk of getting a surprise bill. Loss aversion combined with commitment bias is a powerful force that has led many to their financial grave. It's the investor who watches his entire stake slowly evaporate for his inability to accept defeat and change course. It's the gambler who keeps doubling down to catch up. The solution is to focus on long-term goals.

Value Attribution: We tend to imbue people and things with the qualities of their presentation or surroundings. It's why packaging matters so much. It's why Mercedes dealerships are spotless, spacious marble palaces. But context clouds our ability to see real attributes. We may turn down a pitch or idea presented by the "wrong" person, or blindly follow the advice of someone we highly regard. Similarly, our expectations of "context" influence our assessments. Value attribution bias hinders our ability to objectively assess value. Studies show that the price we pay for a ticket affects our enjoyment of the performance. So make a conscious effort to see things for what they really are and not just how they appear to be. Differentiate between "packaging" and real attributes. Initial impressions can be wrong.

Procedural Bias: We tend to emphasize process and procedure instead of product or outcome. This makes us susceptible to irrational decisions if the process meets our needs or expectations and diverts our attention away from the actual value of the product or service or outcome. Try to recognize when "process" is influencing your perceptions. Try not to lose sight of what you want to get as a final product.

Group Conformity: We like conformity. When a group reaches consensus, members of the group feel pressure to "go along to get along." This can lead to irrational behavior such as groupthink. The good news is that a single dissenter can help the group break out of groupthink and make more rational decisions.