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This week in the news: a big bother

Check out this great article on how likely someone is to pay back a loan. I love it. As a perpetual student of human psychology and behavior, I am fascinated with data like this. As much as we want to believe we are intelligent, rational people there is an abundance of evidence that suggests the contrary. Whenever I contemplate the predictability of human behavior, I think of Robert Cialdani’s Influence: Science and Practice. Cialdani coined the phrase “click-whir” to describe automatic responses of people to stimuli. “Click” is the trigger; “whir” is the response.

The article reviews a study conducted by three economists. The researchers reviewed applications for loans through the peer to peer lending site, Prosper. They found that the language used on applications can potentially be a predictor of whether or not an applicant will pay the loan back on time. Essentially, they found “if someone tells you he will pay you back, he will not pay you back. The more assertive the promise, the more likely he will break it.”

This makes sense when you consider it from other perspectives. When my kids ask if they can go outside to play, I will probably say yes. If they say, “Can we go outside to play? We promise not to build a bonfire.” Now I feel uncomfortable.

What makes me more uncomfortable is the greater reaching implications of this project. I love the idea of “big data” and aggregating information to make us better decision makers, but I hate the idea that everything I do or say will be analyzed.

As the article states, “A consumer looking for a loan in the near future might not merely have to worry about her financial history but also her online activity. And she may be judged on factors that seem absurd—whether she uses the phrase ‘Thank you’ or invokes ‘God,’ for example. Further, what about a woman who legitimately needs to help her sister in a hospital and will most certainly pay back her loan afterwards? It seems awful to punish her because, on average, people claiming to need help for medical bills have often been proven to be lying. A world functioning this way starts to look awfully dystopian.”


The Qantas pie fiasco

The CEO of Qantas Airways, Alan Joyce, was pied in the face while addressing 500 executives in Perth this week. That’s not some kind of hip, business lingo; someone literally hit him in the face with a pie. It reminded me of the famous speech delivered by presidential hopeful Theodore Roosevelt at the Gilpatrick Hotel in Milwaukee. After being shot in the cheek, Roosevelt delivered his (much shorter than planned) remarks; including the phrase, “It takes more than that to kill a bull moose.”

We have come a long way since then; Joyce took a break from his presentation to clean up. Roosevelt demanded to speak with the man that shot him before police arrested him. He had to quiet the crowd first as they were bludgeoning his attacker as he was carried away. Alan Joyce was not even sure about the flavor of the pie (they do not make them like they used to).  


Looking for answers

I don’t normally get into opinion pieces but when they deal with my industry they sometimes make it to my desk. A Wall Street Journal reporter recently went on a quest to figure out how much she was paying her advisor. The article isn’t a scathing review of inflated fees but rather, a depressing story about how hard it is to find out what the fees are. It’s sort of like reading about Theseus navigating the Minotaur’s Labyrinth – except he never quite finds the Minotaur. Or, maybe he finds the Minotaur and just needs to ask him a question but the Minotaur is really vague and unhelpful with his answer, like, “How much do you pay me in fees? That information is in a different Labyrinth – sorry.”

Either way, the hero doesn’t really triumph.



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