Is the Market Aggregating Information About Human Preference?

markets are intelligent because they aggregate lots and lots of irrational preferences into a process of revealed preference, i guess. If everybody buys cars, formulaically, all that information actually gets lost. And so the individual decisions may feel and look more intelligent, but the market is aggregating less information as it's all coming to it in a predigested form. We don't, as humans, really understand what makes us happy. It's only when you're presented with the choice that you really know what you wantand that's getting lost.

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Rory Sutherland is a British advertising executive who became fascinated with behavioral science. Between his TED talks, books and articles, he has become one of the field’s greatest proponents. Rory is currently the Executive Creative Director of OgilvyOne, after gigs as vice-chairman of Ogilvy Group UK and co-founder of the Behavioural Sciences Practice, part of the Ogilvy & Mather group of companies. He is the author of The Spectator’s The Wiki Man column and his most recent book, which we highly recommend, is Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life.

Our discussion with Rory was original published in January 2020, but Rory’s evergreen insights continue to be popular with our listeners so we decided to republish this episode. You can also listen to Rory discuss his latest book Transport for Humans: Are We Nearly There Yet? alongside his co-writer Pete Dyson, in episode 290.

We start this discussion with Rory by asking him about his book and some of his insights from it. His approach to advertising, marketing and product design is informed by his ability to look for the things that aren’t there. He once described a solution to improving customer satisfaction on the Chunnel Train between London and Paris by suggesting that a billion dollars would be better spent on supermodel hosts in the cars than on reducing ride time by 15 minutes. He’s a terrifically insightful thinker.

Our conversation ran amok down all sorts of rabbit holes, as expected, including ergodicity, Sir Arthur Conan Doyle’s “The Silver Blaze,” high-end audio and the dietary habits of the world-famous runner, Usain Bolt.

In Kurt and Tim’s Grooving Session, we discuss some of our favorite takeaways from Rory’s conversation including, “The Opposite of a Good Idea is a Good Idea” and others. And finally, Kurt teed up the Bonus Track with a final reflection and recap of the key points we discussed.

As always, we would be grateful if you would write us a quick review. It helps us get noticed by other folks who are interested in podcasts about behavioral science. It will only take 27 seconds. Thank you, and we appreciate your help.

Links

Rory Sutherland: https://ogilvy.co.uk/people/rorys

“Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life”: https://amzn.to/3xbibt3

“Transport for Humans: Are We Nearly There Yet?”: https://amzn.to/3cZPyIy

Episode 290, Transport Your Thinking; Why We Need To Reframe Travel | Rory Sutherland & Pete Dyson: https://behavioralgrooves.com/episode/transport-rory-sutherland-pete-dyson/

“Friction”: https://www.rogerdooley.com/books/friction/

Murray Gell-Mann, PhD: https://en.wikipedia.org/wiki/Murray_Gell-Mann

Robin Williams “Scottish Golf”: https://www.youtube.com/watch?v=jx8TzR1-n4Q

Don Draper: https://en.wikipedia.org/wiki/Don_Draper

Ergodicity: https://en.wikipedia.org/wiki/Ergodicity

John James Cowperthwaite: https://en.wikipedia.org/wiki/John_James_Cowperthwaite

SatNav: https://www.macmillandictionary.com/us/dictionary/american/satnav