Over at Mashable, Aaron Orendorff has a great piece on behavior economics, so he obviously talks about my favorite expert on the subject, Dan Ariely:

Not to be a killjoy, but as the Washington Post found, roughly 25% of New Year resolutions fall apart within the first two weeks. And even when it comes to our work — where money’s on the line — “70% of [management-led] transformation efforts fail.”

So what works?

“Change,” in Ariely’s words, “comes not from the inside, but the outside. If you want people to lose weight, give them a smaller plate. You have to change the environment.”

This is why free market capitalism can be so dangerous and detrimental. If you have zero intervention from the government and just let the market decide everything, you’re ensuring the rich get richer, or to use the example above, you’re encouraging people to eat as much as they can.

We need to establish a fair environment because we can’t be trusted to be fair on our own. Remember, we’re just monkeys with iPhones.

I just started Ariely’s newest book, Payoff, and it’s great.

The Economists Who Studied All-You-Can-Eat Buffets:

New research shows that paying that much for a buffet might actually make the food taste better. Three researchers did an all you can eat (AYCE) buffet field experiment to test whether the cost of an AYCE buffet affected how much diners enjoyed it. They conducted their research at an Italian AYCE buffet in New York, and over the course of two weeks 139 participants were either offered a flier for $8 buffet or a $4 buffet (both had the same food). Those who paid $8 rated the pizza 11 percent tastier than those who paid $4. Moreover, the latter group suffered from greater diminishing returns—each additional slice of pizza tasted worse than that of the $8 group.

Behavioral economics is so interesting. I was first drawn to it through Dan Ariely’s book, Predictably Irrational.

We like to believe we make decisions based on reason and logic, but so much of what we do is based on emotions and perceptions.