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Predictably Irrational: The Hidden Forces That Shape Our Decisions | 
 enlarge | Author: Dan Ariely
Publisher: HarperCollins
Category: Book
List Price: $25.95
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Rating:  146 reviews
Sales Rank: 75
Format: Roughcut
Media: Hardcover
Number Of Items: 1
Pages: 304
Shipping Weight (lbs): 1.3
Dimensions (in): 9.1 x 6.5 x 1.2
ISBN: 006135323X
Dewey Decimal Number: 153.83
EAN: 9780061353239
ASIN: 006135323X
Publication Date: February 19, 2008
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When it comes to making decisions in our lives, we think we're in control. We think we're making smart, rational choices. But are we? In a series of illuminating, often surprising experiments, MIT behavioral economist Dan Ariely refutes the common assumption that we behave in fundamentally rational ways. Blending everyday experience with groundbreaking research, Ariely explains how expectations, emotions, social norms, and other invisible, seemingly illogical forces skew our reasoning abilities. Not only do we make astonishingly simple mistakes every day, but we make the same types of mistakes, Ariely discovers. We consistently overpay, underestimate, and procrastinate. We fail to understand the profound effects of our emotions on what we want, and we overvalue what we already own. Yet these misguided behaviors are neither random nor senseless. They're systematic and predictable—making us predictably irrational. From drinking coffee to losing weight, from buying a car to choosing a romantic partner, Ariely explains how to break through these systematic patterns of thought to make better decisions. Predictably Irrational will change the way we interact with the world—one small decision at a time.
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| Customer Reviews: Read 141 more reviews...
 Predictably anecdotal October 5, 2008
Blame Malcolm Gladwell - but after Blink: The Power of Thinking Without Thinking social psychologists of the type he featured in that book have been coming out of the woodwork to publish in the pop science market in alarming numbers figuring, reasonably, enough that there's a bit of money to be made on the side. I'm guessing royalties from articles in the International Journal of Psychology would pale in comparison.
One of the latest is Dan Ariely, whose unique selling point is a horrific accident he sustained as a student Israel which left him with burns to 70% of his body. His book does what it says on the tin, by way of explaining a number of social experiments that he and his colleagues have run in the last few years, loosely themed around the observation that we don't always act as sensibly as logic would dictate.
Which is fine - as you would expect, some of the examples are eyebrow raising - but it really shouldn't be news and it certainly doesn't require Dan Ariely to tell us that our liberal western societies aren't as rational as we like to think (incontrovertible proof of that, not offered in Ariel's book, being the politicians we elect and the amount of attention and money we collectively devote to cosmetics, fashion, celebrity and professional sport), especially as deeper epistemological examination reveals the idea of "rationality" is incoherent anyway.
But just as some anecdotes are enlightening, the implications of others are not nearly as plain or convincing as Ariel thinks they are, and some of his experiments struck me as being particularly glib, superficial and susceptible to plenty of alternative interpretations.
And what Ariel's book lacks is any further theoretical drive: OK, we re predisposed to behave in silly or odious ways - but what's your point? In what underlying way are our irrational proclivities linked? What conclusions can we draw; what can we learn; what strategies can we adopt to counteract the harmful effects of our fecklessness?
Ariely implies, but doesn't say, that some sort of regulation is required to save us. But given that it was our irrational proclivities by which we arrived at these politicians (and the political institutions through which they organise themselves) I'm not sure he leaves us any better off than when we started.
Olly Buxton
A helpful addition to the "flawed reasoning" psychological genre September 27, 2008
Predictably Irrational is one of several popular books about the way people really make decisions and judgments. This growing sub-genre includes Nudge, Sway and Mistakes Were Made (But Not by Me).
Ariely lucidly explains the findings of various experiments about decision making. It's easy to find applications in marketing: offering options that serve as anchor points and recognizing the power of "free." These findings are useful but I would like to see more discussion of the implications for everyday life.
For example, most of us cannot predict how we will behave when we're swept up by strong emotions. Yet every day judgments are made by jurors in courtrooms based on, "Well, if I were in that situation..."
Ariely points out the futility of taking too long to make certain decisions. One friend kept dithering over the choice of a digital camera, only to forego months of memories captured on film.
Similarly, he feels he took too long to evaluate a job offer from Stanford. But for major life decisions, a lengthy process can be rational, even if you sacrifice current productivity. You have a greater likelihood of identifying the fact or factor that will be the ultimate deal-breaker.
Ariely created an experiment to demonstrate that keeping options open comes with a high cost. So, he says, keeping one job or one residence for a long time can have a high payoff. Maybe. But often outsourcing options or industry shifts will kill a career. As a career consultant, I advise clients to focus on marketability, not security.
Second, Ariely shows that money changes relationship dynamics. As he says, your family would be insulted if you offered to pay for Thanksgiving dinner.
But while he advocates a greater role for social norms (p. 88), money norms often smooth difficult transactions. The New York Times magazine recently featured an article by an unmarried professional woman who needed a kidney. She wished she could just pay for what she wanted instead of being forced into difficult conversations that threatened her friendships.
Many of us who move frequently have learned to pay packers and movers rather than seek help from well-meaning friends. After all, your helper might drop your new high-definition TV on the sidewalk (maybe breaking a toe in the process).
The absence of money also affects relationships. When strangers email to ask how to resolve a challenging career question or fix a troubled website, I often wonder what goes through their minds. When friends ask, they risk the friendship.
Third, Ariely suggests (p 121) that we apply lessons from auto maintenance to motivate individuals to undergo medical exams. This reasoning seems flawed.
Tests won't prolong lives the way regular oil changes prolong the lives of car engines. After a diagnosis of disease, you should consider false positives. You embark on a journey of life-changing (and life-threatening) medical procedures, lifestyle changes, battles with insurance companies and endless waits to deal with rushed, indifferent or even rude medical staff. A better analogy would be to compare medical exams to auto diagnostics (which car owners rarely choose) or else compare teeth cleaning to oil changes.
Insurance creates economic disincentives that muddy the waters. I know several people who had tests that came back negative -- no disease. A few months later, these folks developed symptoms that suggested a need to repeat the tests. In every case, the insurance company said, "No -- you get one a year." One person told me her doctor ruled out her disease based on a test she'd taken a few months earlier. So skipping a routine exam can be rational.
Any benefits of early detection accrue to the individual, not society or insurance companies. Those who stay alive while making ongoing demands on the medical system will cost more than those who are rushed to the hospital in crisis and die shortly afterward.
In any case, Ariely discusses how doctors resist research findings that point to the effectiveness of placebos. Just what is rational thinking, anyway?
Overall, though, I thoroughly enjoyed this book. Ariely's writing entertains as well as informs. We all need to base our decisions and our lives on how human minds really work, not what "everybody" knows.
It's the Economy, Stupid September 19, 2008
With this week's headlines about the dizzying volatility of the stock market, we've seen investors jump in and out of the game as they've responded to the most powerful emotions on Wall Street: fear and greed. Surprising? Not if you're Dan Ariely, behavioral economics guru at MIT. This may be the most entertaining econ book you'll ever read, as you laugh at other people's foibles and then wince inwardly as you recognize some of the described behaviors in your own life. It may make you swear off shopping, at least for a while.
The basic premise of the book is that yes, people behave irrationally where money is concerned (thank you, Alan Greenspan!). But Ariely's contribution is to prove, through research so far-ranging it will make you pity his research subjects, a.k.a. Poor Sod Graduate Students, that people behave irrationally in quite predictable ways. We will, for example, almost always report more satisfaction with a product if we know it was expensive--even if that means we give high marks to an ineffective medical placebo. On the other hand, we will also go to ridiculous lengths to obtain any product that is "free," a fact that marketers realize and routinely exploit. That chapter reminded me of the Simpsons episode where Lisa asks Homer in disbelief if he is drinking blood. "Correction!" Homer responds. "Free blood." Bottom line? We'll do just about anything to get something for nothing.
There were a couple of great anecdotes in the book. One was about a company that introduced one of the first bread machines in the world. The trouble was, nobody bought it; people who already routinely made bread at home didn't understand why they would need a machine to help them do it, and those who didn't already make bread weren't about to start. The company's marketing folks hired a consulting firm, which advised them to also introduce a very high-end bread machine to sell right alongside the other. It would have all the bells and whistles and be super-expensive, out of reach for most consumers. The point of this exercise was not to push the high-end model but the basic one, which started to sell like gangbusters. Apparently consumers love and need choice, and they always want to feel they're getting a deal. When faced with the option of the high-end machine, they both a) felt justified in buying the less tricked-out version and b) felt that they were part of a movement that was trendy, exciting, and upper-class. Interesting. It's similar to the phenomenon in fancy restaurants that might have a $40 entree. Very few people order it, but its presence on the menu sure makes them feel better about the $26 entree they actually choose.
Another fascinating revelation is that the presence of an honor standard or system really does work. Ariely find that people were less likely to steal or cheat when reminded of the Ten Commandments, for example, even when they couldn't remember what all the commandments were. Just being reminded of some sort of honor benchmark (which could be anything, not just something religious) helps to prevent cheating. Also, people are less likely to steal when the results of their thievery are direct. In an informal experiment, when Ariely put Cokes in his refrigerator at work, they disappeared readily. When he put actual cash in the fridge, no one touched it. As he points out, stealing food and beverages is out of someone else's pocket, as if they had stolen cash, but most people stop short of stealing actual money. This is why white-collar criminals try to justify their behavior as victimless crime.
It's not a perfect book, and some of the research is too anecdotal to convince Ariely's fellow economists, but for the general reader it's fantastic--well-written, story-driven, and even funny. High marks.
[This review is also posted at The Review Revolution: janariess.typepad.com]
 Reality is absolutely relative. September 16, 2008
At first glance, the title of Dan Ariely's book seems to be an oxymoron. (It certainly catches one's attention.) Can irrational thought and/or behavior be predicted? Perhaps if it is repetitive? (The judgment and behavior of at least some people can be repetitive and thus predictable.) So I began to read his book with curiosity but also, yes, with some skepticism. Here are a few of my reactions. First, he learned a number of "lessons" from what he calls "experiments" in his life, each of which struck him as being counterintuitive. For example, everything is relative...even when "it shouldn't be"...or in fact isn't. That is, our mind can "play tricks" on us and thus we tend to see what we expect to see, hear what we expect to hear, etc. Images and sounds are relative to their context or frame-of-reference within which we place it. Or consider the frequently expressed observation, "one man's trash is another man's treasure" or one or more of self-serving juxtapositions such as "He's a tightwad whereas I'm frugal...she's narrow-minded whereas I'm a specialist...They're stubborn whereas I stick to my convictions." Ariely's other lessons also, directly or indirectly, involve illusions and delusions of one kind or another. They explain why we can't make ourselves do what we want to do, why we overvalue what we have and especially what we purchase, and "why a 50-cent aspirin can do what a penny aspirin can't."
As I worked my way through the first few chapters, I was reminded of a joke I heard years ago. This fellow arrived just in time to tee off for another round of golf with three friends. They played every Saturday morning. "Hey, I've got great news! Just bought the best hearing aids that money can buy. They cost $8,000 each but they're worth every penny. It's a whole new life for me. Never been happier." "You spent $16,000 on two hearing aids? That seems expensive." "Nah, like I said, worth every penny." "What kind is it?".... The fellow glanced at his watch. "Exactly 7:30." To paraphrase Descartes: It is if I think it is.
Also, Ariely shares what he learned about the differences between conventional economics and behavioral economics. Contrary to "the far-reaching conclusions" that generations of economists have developed "about everything from taxation and health-care policies to the pricing of goods and services," asserts that human beings are far less rational than standard economic theory assumes. "Moreover, these irrational behaviors of ours are neither random nor senseless. They are systematic, and since we repeat them again and again, they are predictable." (Hence this book's title.) Ariely makes a convincing, at times humorous but nonetheless rational argument to support modification of standard economics, "to move it away from naive psychology (which often fails the tests of reason, introspection, and most important - empirical scrutiny)." He collaborated with a number of colleagues when conducting various experiments that enabled them to "slow human behavior to a frame-by-frame narration of events, isolate individual forces, and examine those forces carefully and in detail." The results of the experiments illustrate general principles of human behavior (e.g. the decision-making process) within and beyond the workplace.
Finally, I admire the extent to which Ariely succeeds in explaining the fundamentals of economics and social science for a reader such as I who knows essentially nothing about either. (Oh sure, I have some scraps of information and countless opinions but....) For example, in Chapter 9, Ariely describes an experiment that he conducted with two MIT professors to answer questions that include "How to explain violence? Why does it happen? Is it an outcome of history, or race, or politics - or is there something fundamentally irrational in us that encourages conflict, that causes us to look at the same event and, depending on our point of view, see it in totally different terms...We came up with a simple test - one in which we would not use religion, politics, or even sports as the indicator. We would use glasses of beer."(I do have extensive prior experience with beer!) The details of this experiment are best revealed within the narrative but I will indicate that the material in this chapter provides a number of revelations that help to explain "the hidden forces that shape our decisions."
Congratulations to Dan Ariely on a brilliant achievement!
Nudge Lite, Great Read!! September 15, 2008
1 out of 1 found this review helpful
I borrowed my Mom's copy of Nudge but couldn't get into it. It was a little more academic than my payrate, so to speak. I got this book instead and I am glad I did. Arely takes a breezy fun approach to Behavior Econmoics that made it easy for me to digest. He offers no advice, just information about some of the hidden aspects of human behavior. Gread Read, Bottoms Up!!
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