QUOTES:

One of the things that fascinates me in life is, I suppose from behavioral economics, what you might call cognitive biases. When solving problems, we are strongly biased toward certain solutions and against others.

I think placebos are pretty good. They're extremely cheap, proven to work, and don't really have any side effects—or if they do, they're imaginary, so you can satisfactorily ignore them.

People love to think that organizations and people work the same way that machinery does.

A perverse incentive is one that seems completely logical and sensible to management consultants, but the effect it probably has is the opposite of what is intended. A great example of perverse incentives came about in 18th-century France when they were badly overrun with squirrels. They set up a bounty for squirrels' tails, where you got paid a certain amount for every tail you presented to the authorities. They thought the squirrel problem would be solved in a few years, but the amount they paid out kept increasing, and the squirrel problem got worse. It was only then they discovered people had started intensive squirrel farming to make money from the tails.

Most human behavior doesn't follow physical laws.

Paying people to perform creative tasks rebrands that activity as work and makes people less keen to do it. If you reward children for painting pictures, they stop doing it earlier than those who are painting for fun.

Utterly trivial things transform the way people make decisions and act, while fairly massive interventions often have no effect, or even a perverse effect, where people do the opposite.

The problem is that most train journeys start with a car journey, so the symmetry of decision-making is imperfect. If, by the way, you have kids and have already packed the car with seven tons of shit, the decision is already made for you because there’s no way you’re getting to the train. You're also uncertain about things like whether there’s room to park at the station, if your car will be safe, or what time the train is running. It’s an asymmetric decision. If you can use technology or pricing to get people to book train journeys a day in advance and possibly reserve a parking space, simply moving that decision one day earlier can eliminate the asymmetry.

Behavioral economics simply states that the context, medium, and interface within which a decision is made may have a far greater effect on the decision than the long-term consequences, even when we know those consequences.

One of the things you understand is that many aspects of life, particularly those involving human psychology, are not well-solved by the most direct and obvious solution. As I mentioned earlier, if you apply the most direct and obvious solution, you may have opposite results. For example, businesses that seek to make the most profit are not the most profitable. By and large, the most successful businesses are those that pursue an oblique end. They have a vision or ideal that drives them. If you look at the world's great brands, they are almost all the creations of someone who is slightly mad—Jobs, Knight, Kellogg, Ford—they were all a bit eccentric. But because they pursued a bigger, crazier ideal than simply short-term profit, their businesses became more profitable. Kay makes this point well.

What we need to overcome is the human bias to view things that are inexpensive as less valuable. One of the great problems of capitalism is that when you produce things at an increasingly low price, whether due to production efficiency, sustainability, or minimal labor, the price decreases, and with it, the perceived value.

The better capitalism does its job, the less appreciative we become because of this perverse way of valuing things based on their expense.

Instead of thinking, "How can I persuade people to buy my product? How can I bludgeon them with arguments, rationality, and reason to buy what I have to sell?"—if you sit down and think, "I have a burger. What’s the equivalent of ketchup, a bun, or fries?"—in other words, how can I create complementarity for this product? You'll come up with more interesting digital advertising solutions than if your first thought is persuasion. Besides, it's not altogether clear that persuasion is very persuasive.

One of the brilliant things to look for in marketing is disproportionality—how very small things can have a huge effect.

The glorious thing about marketing is that you can create massive amounts of desire, delight, memorability, and distinction with trivial levels of expenditure.

The trouble is, there are no numerical measures for how nice a journey is. When given money, people often spend it making the journey faster, rather than better. I once briefed some creative teams with a marketing budget of six billion. "What would you do with the Eurostar?" One group suggested adding Wi-Fi to the trains—there is still no Wi-Fi on the train. They said it doesn’t really matter if the journey is three hours or two and a half if it’s productive time. Fair enough. Another, more creative team said, "I would hire the world’s top male and female supermodels to walk the length of the train, handing out free champagne." You’d still have five billion pounds left, and people would ask for the trains to be slowed down!

All organizations—businesses and governments—look for huge, grandstanding solutions to problems, while human behavior is just as receptive, if not more so, to small changes.

The great problem in life isn’t that we’re failing to provide ourselves with interesting things—it’s that our appreciation of those things needs to be heightened.

A great definition of poetry is to make new things familiar and familiar things new. One fascinating thing advertising can do is get people to look at old things in a new way.

One way to add value is by producing advertising that is indulgent and beautiful.

The fact that someone has a reputation to lose is one of the many things that gives you confidence to do business with them.

The reason women love being bought jewelry and flowers by men is because of the sacrifice involved. It's precisely because men aren’t interested in jewelry and flowers that it’s evidence he loves you—he’s prepared to buy something he doesn’t like. If you buy your girlfriend the complete first season of Battlestar Galactica on DVD, there might be a small suspicion of self-interest.

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