Man of influence

Dan Ariely is a best-selling author, a Wall Street Journal columnist, a sought-after speaker, a behavioral economics professor and one magazine recently said he is one of the 50 most influential people in finance. He’s also a Carolina alumnus.

He describes Carolina as a “combination of being a beautiful place, but much more importantly, incredibly warm.”

Ariely studies behavioral economics. He’s the James B. Duke Professor of Psychology and Behavioral Economics at Duke University and a founding member of the Center for Advanced Hindsight. While economists and behavioral economists are interested in the same things, such as finding out what consumers buy or how they make decisions, behavioral economists also study how people actually behave in a given situation, Ariely says. It turns out that humans are quite irrational, more Homer Simpson than Superman, as Ariely says.

“What I do is I look at how we behave within the constraints of the systems that we have engineered and I say ‘what do I think is not right here, what do I think we can fix’ and then I try to spend time figuring out how to fix it,” Ariely says.

His wide-ranging studies have focused on why we buy expensive coffee to why revenge is important to us to why we don’t believe marketers. Among the topics he’s researching now: How to get relatively poor people in Kenya to save a little bit for a rainy day and how to get people in South Africa to eat healthier.

Ariely was born in New York and grew up in Israel. When he was 18, he suffered third-degree burns over 70 percent of his body when a large magnesium flare exploded. Ariely was hospitalized for the next three years, wrapped in bandages, and he rarely went in public. During that time, Ariely began reflecting on the goals of his and other people’s behaviors, he wrote in his 2008 book, “Predictably Irrational.” Ariely also reflected on the extensive pain he was in and the medical treatments he was receiving.

In particular, he writes that each day nurses would change his bandages in a process that “hurts like nothing else I can describe.” The nurses would rip off each bandage as quickly as possible to speed up the process, which would take about an hour. Ariely believed that taking the bandages off slowly would cause less pain. A few years later, he tested his theory through laboratory experiments and found that his idea about minimizing pain was correct. He presented his findings to the hospital’s burn department, which agreed to change its procedures.

Ariely started studying math and physics but because he wasn’t able to use his hands as well, he says he couldn’t really solve anything. In college at Tel Aviv University, Ariely asked his mother to sign him up to study philosophy. When she tried, she was told she also needed to choose another subject as well. She selected psychology. Upset at first with this decision, Ariely soon discovered that psychology was a tremendous way to have questions about the world and answer them.

“I think in my heart I am actually, probably, an engineer,” Ariely says. “I want to design systems that are better but what I end up doing is I end up trying to engineer better systems that use psychology.”

When it came time to look for graduate schools, several people Ariely knew recommended Carolina. On his visit, he found that the campus was beautiful and the people were kind.

“I appreciated almost every professor I had,” Ariely says. “It was an incredibly warm, caring place. Everybody worked hard, but there was definitely a deep feeling of belonging to the place.”

At UNC, Ariely says he learned to appreciate expertise, that the people teaching him were experts in their field. He also learned lessons from faculty members that influenced the way Ariely works with his graduate students now. He tries to keep coffee and food at his research office and he tries to get the group together on a skiing trip once a year. He does this because he remembers the kindness of a UNC professor who acknowledged that graduate students were often overworked and underappreciated and she tried to fix it as best she could, he says. Ariely also remembers an adviser who often took Ariely’s “half-baked” ideas and graciously helped turn them into stronger ones. Because of that, Ariely says he tries to help his students develop their ideas and give them a sense of ownership and connection to their work.

In his books, Ariely weaves in stories from his own life so when he meets people, many often feel like they already know him. He also receives about 300 emails a day, often from strangers, who have comments about what they have read or have questions for him. He tries to respond to them and will answer some in his Wall Street Journal column.

“I feel incredibly privileged with all of this,” Ariely says. “It’s not that it’s not a lot of work. It is a lot of work.”

He fondly remembers sitting next to a woman he’d never met on an airplane. The woman happily recognized him and had a story for him. She told Ariely that when she had read “Predictably Irrational” she was debating whether to use an insulin pump or continue taking injections to control her diabetes. The woman told him that at that time she had an imaginary conversation with Ariely in her mind and decided that Ariely would have recommended she use the insulin pump.

“I thought ‘what an amazing thing,’” Ariely says. “And she got it right.”

By Natalie Vizuete, University Relations staff.

Published December 10, 2013.