"No one ever got fired for buying IBM" is a wonderful example of understanding loss aversion. The advertising and marketing industry kind of knew this stuff mattered, but where we were disgracefully bad is that no one really attempted to sit down and codify it. When I discovered Nudge—Predictably Irrational—was another one, when I started discovering there was a whole field of literature about this thing for which we have no name—these powerful forces which no one properly understood—that was incredibly exciting. The effect of these changes can be an order of magnitude. This is the important thing. ...
...Markets actually work because they're adaptive and they're responsive to new information. Bad things get killed, good things get promoted. But most of the time what you'll find in business is no one has the faintest idea of why the things that work actually work. What's very useful here is that finally a group of academics with money, time, and high intelligence were finally sitting down to codify and make sense of things, which we'd been aware of for years but which, to our shame, we'd never attempted to actually try and systematize.
RORY SUTHERLAND is Executive Creative Director and Vice-Chairman, OgilvyOne London; Vice-Chairman, Ogilvy & Mather UK; Columnist, The Spectator.