Customer Reviews:
 Reality is absolutely relative. September 16, 2008
1 out of 1 found this review helpful
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!!
 Unpredictably Bad September 11, 2008
5 out of 12 found this review helpful
Disappointing in a big way. Very shallow. I am also disappointed in myself: though the hype train rolled for only a short time, I leapt on it. Shame on you NPR for implying there was heft to this trite brochure fluffed out into a book.
You'll laugh, you'll think, you'll be entertained September 11, 2008
This was a terrific book but far from perfect. Ariely describes numerous studies. Readers will object to methodologies used and many of the author's conclusions and thoughts. But we have to keep in mind that the topic of the book is behavioral economics which makes disagreement and lack of perfect studies okay. Behavioral economics is not a hard science like physics or chemistry. Studies in hard sciences need to be reproducible to a greater degree than in behavioral economics. People who object that economics is not a science are correct in some sense but also many also do not appreciate that despite it not being a hard science it is still a very important discipline. The studies mentioned in this book are different than studies in hard sciences, where you can predict to a great degree of accuracy what will happen if you repeated the study, but we still should not discount the importance of these studies.
Ariely is entertaining and his enthusiasm is contagious. Whether you agree or disagree with his conclusions, he gives you lots to think about. As a bonus, there are real life applications to his studies that readers can immediately implement in their own lives.
Dozens of studies are mentioned in this entertaining book. Thoughtful readers may object to methodologies and the author's conclusions. For example, in one study demonstrating how free items are valued irrationally highly the author mentions that (actual numbers may not be accurate here, but you'll get the idea) 73% of participants chose to buy a 15 cent Lindt chocolate over a 1 cent Hershey's Kiss. When the price of Lindt was dropped to 14 cent and the Hershey's Kiss was free then 65% chose the Kiss over the Lindt. Isn't that irrational? Maybe but maybe not. Did a lot of people in the first scenario walk away without buying either and in the second scenario there was absolutely no draw back to selecting the free Kiss so they chose that over the Lindt. Perhaps if I were to look at the original study (which I didn't but there are references which the curious reader could pursue) I would find that this point was addressed. Ariely, himself, even discusses some points which would lead us to conclude that participants were indeed rational.
The author makes policy implications and makes the point that due to human irrationality traditional economics may not depict the real world as much as it could. This is a very valid point. For example, many Business School professors have been preaching the efficient market theory, which many others including the world's greatest investor, Warren Buffett, would not agree with. Ariely challenges the assumptions of traditional economics which ultimately will improve the discipline much like how Einstein improved physics when he challenged some of its assumptions.
This is an outstanding book and Ariely has done a great service by making these concepts readable for people not just in academics. I highly recommend this book and if you enjoyed this one then don't miss "Influence" by Robert Cialdini.
a chance to understand hidden dynamics September 7, 2008
You never really know what's going on! Therefore, thanks to Dan for this book to help us uncover at least some of it. As I attempt in my own book, "The Expert's Edge," he offers us all a chance to understand hidden dynamics that, once we are aware of them, can drive us to success... and life satisfaction!
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