So, How Rational Are Your Habits?

I've been reading Dan Ariely's book, Predictably Irrational, and some of his conclusions are downright fascinating. (I should note that the copy I read was an advanced reader's edition, which was of course edited before publication, so no guarantees on the accuracy of the quotes.) In the second chapter Ariely explains how

"our first decisions resonate over a long sequence of decisions. First impressions are important, whether they involve remembering that our first DVD player cost much more than such players cost today (and realizing that, in comparison, the current prices are a steal), or remembering that gas was once a dollar a gallon, which makes every trip to the gas station a painful experience. In all these cases the random anchors that we encountered along the way and were swayed by remain with us long after the initial decision itself."

Apparently this is why Starbucks is so successful. He uses a metaphor of walking past a restaurant and seeing a couple people waiting in line, and joining the line thinking the place must be good. We also copy our own previous actions on the assumption that it was good (it was what we decided to do, after all). He says you walk into Starbucks the first time in need of caffeine, are shocked by the prices, but buy a small cup of coffee, enjoy it, and leave. The next week you walk by again and, if you proceed rationally, calculate the price at Starbucks compared to the cheap coffee you usually drink, and take into account the cost/value of going to the other place instead of Starbucks, which is right in front of you. But because this is a lot of work,

"instead, you resort to the simple approach: 'I went to Starbucks before, and I enjoyed myself and the coffee, so this must be a good decision for me.' So you walk in and get another small cup of coffee."

You thus become the second person in line at the restaurant, and the more you repeat the action, the more you assume that all your prior choices were good ones. You feel more and more that you are acting on your preferences, and there you have a habit. Then upgrading from a small coffee to a bigger one (with more coffee per dollar!) seems like a good bargain, and you try all the fun drinks as well.

Ariely suggest that we don't realize the significance of our first decisions: often arbitrary choices become the foundations for lifelong habits. He mentions choice of career, spouse, clothing and hairstyle, and food as examples.

I tend to think very carefully about most of my initial purchases, and even a lot of the repeat ones. I'm one of those people who likes variety, trying things new, and trying to improve on the system. But every now and then I'm surprised by how long I've been stuck on a wrong assumption: the longer my hair gets the better, I'd never enjoy biking to school, a few cookies before bed can't hurt anything (mmm, shortbread cookies! I'll give that habit up tomorrow!), I'm OK if I skip reading scripture for a day, I'll just read one more chapter of this novel before going to bed, I'll definitely need a house at least as big as my parents', buying a drink with my lunch instead of opting for water doesn't cost me much, I should check and see if I have any important emails by now...

We thought long and hard about the purchase of a sofa, because it was a relatively big expenditure for us. The thing about habits, though, is that habitual activities and expenses account for most of our resources. What other habits are too comfortable for our own good?