I had the honor to participate in Mashable’s author series, and recently received Ori and Rom Brafman’s Sway. Within about 3 days I finished the book (a relatively rare feat for me), and have this to say: this is a great book. It’s a fascinating book. And it’s an important book.

Much like Freakonomics, The Tipping Point and Blink, Sway makes heady academic subjects - in this case, behavioral economics, social psychology and organizational behavior - accessible and relevant to a lay audience, illustrated through real-world examples of otherwise rational people acting irrationally. Why do humans often make irrational decisions? The book is replete with examples, and explanations of the cause or mechanism when known, that illustrate each of these phenomena:

1. loss aversion - we are more sensitive to the loss of something than we are elated by an equal gain
2. commitment - we repeat a pattern that has worked in the past even though it is obvious it no longer works
3. value attribution - we impart worth based on the perceived value of something, not objectively-measured criteria
4. diagnosis bias - it’s difficult to shake a first impression of something
5. the “chameleon effect” (the Pygmalion Effect and Golem Effect) - people tend to rise to the level of expectations set for them (even subconsciously)
6. procedural justice and fairness - we can make decisions against our own economic benefit if we feel fairness has been violated
7. rewards vs intrinsic motivation (altruism) - we find it difficult to be motivated by both financial gain and altruism at the same time
8. group dynamics and social pressure - an expression of a correct dissenting opinion can be blocked if there is perceived unanimity

The book includes many compelling examples to corroborate these, but let me share three of them:

• a Harvard MBA professor has a game in which students bid in $1 increments how much they’d pay for a $20 bill. The catch is that the runner-up also has to pay their final bid, even though they don’t win. Students will routinely bid well past $20 (in one case to $204), because neither wants to pay money for nothing, even though each bid after $20 is already a losing proposition. [an illustration of loss aversion and commitment]
• Swiss towns were asked to store the country’s nuclear waste. Their agreement dropped drastically when a financial incentive was introduced. [an illustration of rewards vs altruism]
• Israeli soldiers in a commander training program were completely randomly assigned a score that officers were told was an assessment of their commander potential (it was not shared with the soldiers). After the training period, soldiers who were assigned a bogus high commander potential score at the outset performed significantly better on exit exams than those randomly assigned low commander potential scores at the beginning [an illustration of the chameleon effect]

The reason this book is so important is that we’re all guilty of irrational behavior. The book demonstrates that the brightest, best-trained and most competent of us can fall into these traps that are often part of our neurological design. The book’s prescription? Awareness. Simple consciousness of an irrational drive can allow our rational mind to put in an override.

And, with that in mind, I’d like to play the devil’s advocate myself, with respect to three conclusions drawn from examples in the book. I have not investigated the original studies (although the Brafmans provide sources in the end notes), but based on what I’ve read, my skeptical mind wonders:

• in chapter 1, it’s suggested we choose flat rates instead of a la carte (pay-per-use) plans, like for cell phones and rental cars, because we’re trying to avoid a disastrously large bill. I have to disagree here. The reason I feel better about a flat rate, and I tend to choose them, is that I do not want the mental burden of having to weigh the value of making or accepting a call against its cost each and every time. The extra I end up paying for a flat-rate plan is worth it for the brain energy it saves me. [Update: research supports this!]
• in chapter 4, an NBA’s draft selection order was determined to have a pronounced effect on the amount of their game play. It’s suggested that the draft order is meaningless once the player has joined his team, with the other measured characteristics - scoring, toughness and quickness - being the only metrics that should matter. Now, I’m no basketball expert, but isn’t it possible that there are other unvoiced, latent talents that a team manager might measure subconsciously but might not be aware of enough to know to measure it? Like leadership, or dynamic with other players on the court? My sense is there might be something else to a team manager’s decision that goes beyond an individual player’s scoring potential that might make him an asset to have out on the court.
• in chapter 5, elderly people who had used negative and external descriptors of themselves showed more signed of degenerative aging than those who had used positive and internal words to describe themselves. I wonder if those who were describing themselves negatively, or focusing on their external appearance, did so because they sensed they were suffering from a medical problem or simple lack of wellness that hadn’t been isolated as part of the experimental protocol. I guess I’m wondering if the supposed cause of their aging wasn’t in fact an effect, instead.

These are not challenges to the relevant studies or to the book; they’re simply questions that came to my mind as I read each example. I had recently read two other fascinating books, Stumbling on Happiness by Daniel Gilbert, and Good Calories, Bad Calories by Gary Taubes, that demonstrate that widely-accepted notions and even research can fail under closer scrutiny.

This book warns against falling into the trap of value attribution, too, so I’m fairly sure Ori and Rom Brafman can appreciate my doubts.

The Mashable Author Series will include a live chat later today with Ori Brafman, and has had two posts (an introduction, and on VC irrationality) guest-written by Ori.