Professor Ariely's Insights, In Brief:

“In a market where employees’ loyalty to their employers is often wilting, social norms are one of the best ways to make workers loyal, as well as motivated.” Treating employees like “family” or members of a team tends to make them more “passionate, hard-working, flexible, and concerned.” However, companies that model a social exchange must remember that they can’t expect employees to take on more work, put in longer hours, and travel at the drop of a hat without providing loyalty in return.

When people start making tremendously high compensation, they are driven by the amount of the bonus, the stress involved in attaining it, and the fear of not getting it, instead of doing the best job they can.

When we can’t determine the right answer to the question facing us, we often figure out the answer to a slightly different question and apply this to the original problem. If a lender says you can afford a mortgage payment of up to 38% of your income, most people accept it as an implicit recommendation that they should spend that much.

If we rely too heavily on the expectation that people will act rationally, we can end up making mistakes when we design policies and institutions.

Finally, we are not helpless. Ariely urges us to “learn to embrace the Homer Simpson within us, with all our flaws and inabilities.”