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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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Avg. Customer Rating:  152 reviews
Sales Rank: 176
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
Publication Date: February 19, 2008
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Condition: New & Unread Book with Remainder Marked- May Have Slight Handling Wear From Bookstore Shelf- Instock For Immediate Shipping
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Product Description
- Why do our headaches persist after taking a one-cent aspirin but disappear when we take a 50-cent aspirin?
- Why does recalling the Ten Commandments reduce our tendency to lie, even when we couldn't possibly be caught?
- Why do we splurge on a lavish meal but cut coupons to save twenty-five cents on a can of soup?
- Why do we go back for second helpings at the unlimited buffet, even when our stomachs are already full?
- And how did we ever start spending $4.15 on a cup of coffee when, just a few years ago, we used to pay less than a dollar?
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 147 more reviews...
 Welcome to the fuzzy world of being human. February 19, 2008
153 out of 175 found this review helpful
Dan Ariely is the guy you'd want at your dinner party. He's witty, smart and also very inclusive - sharing his passion for the way humans tick in a way that makes us feel great about the fact that, rational as we like to think we are, we make bad snap decisions, we cheat and we get ruled by our heart precisely when the facts are screaming "go the other way!" There's a lot in this writing which celebrates our human-ness. Why do we do this?
What Ariely has done here is shift a lot of the thinking developed by such pioneers as Kahneman & Tversky who worked in behavioural economics, and moved it into the everyday sphere. And he's done a great, insightful job. Where the behavioural economists are focused on financial decisions (why we buy high and sell low - and confound the assumptions of the classic economists who assume 'the rational man,) Ariely eschews the technical language and walks us through everyday examples of our often fuzzy and quite irrational decision-making.
The result is utterly engaging - and this easy 300 page read still has academic rigour and strong foundations. Ariely cites many experiments and examples, and shows that we often get things wrong because we frame things the wrong way, mis-judge probabilities, apply heuristic rules of thumb that don't always work, or we just plain let our emotions rule.
We love to think that we're educated, rational and moral. Yet who hasn't overestimated the upside on a sure-fire investment, bought some clothing that we knew was a mistake even as we bought it, or got our wires crossed between work-rules and social rules? This book is fascinating, entertaining and very, very illuminating.
- Recommended for the general public, but I'd urge marketers, market researchers and business people to read this one carefully. Dan provides excellent dinner-party insights, but they apply to our real world and explain why so many poor decisions are made - whether by customers or by the 'rational' business people who make million-dollar decisions.
- Recommended companion book: Nudge: Improving Decisions About Health, Wealth, and Happiness here one of the godfathers of behavioural economics discusses the way we can manage the "choice architecture" in our world.
Exploring why so much of what we do doesn't make sense February 19, 2008
30 out of 36 found this review helpful
I had the privilege of taking Dan's class at Duke last fall, where all of us got the chance to read preview copies of Predictably Irrational. Of course, not everyone will get the chance to hear Dan's excellent lectures, but the book does a great job of capturing his wit while providing a wealth of information about why human behavior can be as fallible as it is.
The joy in this material lies in the fact that every few pages you will find yourself smiling because you too have behaved in the irrational manner being described, and now that you look back on it, it's hard to remember why.
Why are we so excited about free stuff, even if we just throw it out later? Do we convince ourselves that an expensive meal will taste better than a cheap one? And why are we motivated to act on some humanitarian disasters, but not others? We all make irrational decisions at times, but this book provides the rare opportunity to reflect on those decisions and observe the behavioral patterns underneath.
If you enjoyed Freakonomics or any of Malcolm Gladwell's writings, you will also enjoy Predictably Irrational. The pace is quick, and nearly every page contains some nugget of surprising information that you'll want to tell your friends. It is more like Freakonomics than Blink or The Tipping Point in that it is structured around experiments, with each chapter covering the results of experiments in a specific area of irrational behavior, the implications for society, and what individuals might do to mitigate it.
It's a hard book to put down, and it's both entertaining and interesting from start to finish. For those who are curious about the world, this might be the ultimate beach or airline reading!
We are not so irrational. But, it is still a great book April 22, 2008
7 out of 7 found this review helpful
This is a very entertaining book. Ariely's research is turning behavioral economics into a "hard" science or at least an empirical one. The minute he comes up with a new hypothesis he also comes up with a way to test it using his MIT students as a social science lab. Many of his experiments and other ones he studied are already classics in social sciences. The experiments where drugs that are expensive are more effective than cheaper ones (even though the actual drug was identical) and wines that are expensive taste better (even though the wine was the same) are already notorious. You probably read about them in Scientific American or Psychology Today.
Ariely starting point is with our dominant sense: vision. He shows how our eyes can be fooled. Depending on how an image is presented we see objects' size and colors differently from what they are. At his website, he shows many more intriguing visual traps. So, if our eyes can be fooled, can our abstract reasoning be tricked too? Do we make judgments assuming we are rational when we are not? Are those irrational behaviors predictable? That's what this book is all about.
Some of his examples are pretty intriguing. People bids for various objects were influenced by the last two digits of their social security number (that they were asked to recall before bidding). This is "price anchoring." His example of the Duke Basketball tickets is baffling. He becomes a middleman buying tickets from ticket owners to resell to others who did not get tickets. He found no takers as the average asking price from ticket sellers was an amazing $2,400 and the bid price from potential buyers was $175. That's a huge bid-ask spread that seems truly irrational. The zero effect is interesting too. We often make poor choices because something is thrown in for free. Ariely smartly connects the zero effect to our wired-in strong loss avoidance. If something is free, we can't possibly loose anything right? We think that way. Ariely uncovers situations where we make bad choices that way. Chapter 8 makes a good case for simplifying our lives and focus on the few things we love and are effective at. Instead, we encumber ourselves by maintaining choices open and reduce our productivity and happiness overall.
His writing on the placebo effect and expectations is excellent. One part I found shocking is when he states the couple of well established surgical operations (a form of bypass surgery and knee arthroscopic surgery) that were tested against placebo (fake surgeries). They showed no benefits. He pondered how many other surgeries would this also be the case for?
Another classic experiment he mentioned related to expectations was the math test taking of American Asian women. When they thought of themselves as Asian they did better than when they thought of themselves as women. So, expectations affect performance.
But some of Ariely's examples may not denote irrationality. When he indicates that when people move from an expensive real estate market to a cheaper one, they spend close to the same amount on their new home vs what they sold their old home for. By doing so, they buy more of a house than they need. The reverse is true too. When moving from a cheap real estate market to an expensive one, people buy much smaller homes and end up being cramped. He calls that irrational. But, people just buy what the sale proceeds of their old house allow. He also states that lawyers will turn down an offer to work for $30 to give legal assistance to the elderly. But, they'll accept to work for free (volunteer). For a lawyer, volunteering generates goodwill within his community. Meanwhile, working for cheap does not. I don't view that as irrational. When people order beer in the U.S. they order different brands to promote their individuality. Meanwhile, in Asia they tend to order the same brand to promote cooperation. But, is it irrational to follow cultural norms?
Even though I don't think we are quite as irrational as Ariely suggests, this is still a fascinating book. You can tell I really enjoyed it. If you found my review interesting you will like it too. I also strongly recommend Scott Plous's The Psychology of Judgment and Decision Making that covers the same topic.
Practical application for a sales guy... June 27, 2008
7 out of 7 found this review helpful
This book is recommended reading for anyone that is in sales (and aren't we all in some manner). This reviewer sells enterprise SaaS applications/outsourcing to large companies and this book is instantly applicable in my career.
Chapter 1 is worth the price of the book itself! Relativity is key...how many of us non-academics that have to present business cases or influence people for a living have seen the "analysis paralysis" invade our propspective decision making committees? How many times have you assumed your audience will take the information you are presenting and act on it rationally...this book has helped this reviewer to see that it is simply not the case. Futhermore, the author helps with framing decision scenarios...think of it as a blueprint to work from.
It's also refreshing to read a non-academic book with ideas on human behavior that are:
- written by someone with very high credibility
- based on evidence
- not found in the "sales help" section of my local bookstore (thank you Amazon recommendations) where the premise of decision making is flawed from the outset.
I don't get some of the criticism about left leaning ideas in this book...it's certainly not a theme of his to promote bigger government. Rather, to the author's credit, the one comment I do recall on health care pricing is a hypothesis that he can support with some evidence...even if you don't agree with him it's an interesting thought experiment.
There's so much more to take away from this book that can be applicable to one's life...that's not an exaggeration as Chapter 8 (Keeping Doors Open) was profound...I enjoyed this book from beginning to end.
One last comment...the chapters on dishonesty are fascinating!
Almost Did Not Buy, Reviews Too Negative--This Was Worth My Time March 29, 2008
87 out of 116 found this review helpful
I almost did not buy this book as I sought to explore the new literature on behavioral and cognitive science. The negative review are too negative. You get from this book what you bring to it in open mindedness, in my opinion.
My truth-teller, off-setting the reality that this is a double-spaced book that inflates 120 pages of thought into 240 pages of easy to digest presentation, is the author's unique provision in the end-notes of both direct references to seminal works that each chapter is based on, with additional references suggested, AND his recognition of 17 collaborators, each with a long paragraph of biographic information. This is in short a worthy work, it was worthy of my time, and I do not agree with those who are dismissive or cavalier about this book.
As with Nudge: Improving Decisions About Health, Wealth, and Happiness and other works of this ilk, they seem to be blessed with an immaculate conception that fails to recognize the work of the 1960's and 1970's (e.g. Herbert Simon, "satisficing," but I no longer mark this down--this is a new generation thinking new thoughts, and I have decided it is too much to expect them to go back more than 20 years.
The opening of the book is impressive. The author was burned on 70% of his body by a magnesium flare, and his probing of his own pain and how the nurse's had settled on fast painful ripping off of the bandages (with no medication.
Key point early in the book: most people don't know what they want until they see it in context. This is one reason I am planning an edited work in 2009 on Cultural Intelligence. As Howard Bloom teaches us in Global Brain: The Evolution of Mass Mind from the Big Bang to the 21st Century, we (and our policy makers) know nothing of "the other," and I have concluded that peace starts in kindergarten and we have to separate the Israelis and the Palestians, and literally baby sit two new generations from birth to the age of 35.
The rest of the book is easy to read, has excellent real-world examples, and each chapter generally ends with a short appendix with real results. This is not a fluff book, it is a serious book that the light reader will mistake for fluff.
+ Relatively and "bracketing" matter (sell what you want by bracketing it with a more expensive option above and a trashy cheap thing below)
+ Decoys matter (e.g. a middle option that makes the "combined option" a "no brainer")
+ Publishing salaries actually sets off ego wars at the top and churn at the bottom that leads to more turnover and more wasteful employees costs.
+ Imprinting is used by the author to explain "anchoring" (e.g. black pearls anchored in setting of most expensive diamonds, this is an example of how the SELLER is setting the price, not the buyer).
+ "Free" is never really free. It can blind rational choice and it can "cost" time, choice, and a higher value that is obscured (e.g. my cotton socks disintegrate within months, whereas the cotton socks I inherited from an earlier era are still lasting forever).
+ HOWEVER, I especially liked the way the author explored "free" as a device for policy furtherance, e.g. make vehicle registration "free" if you own a hybrid car.
+ Social versus market norms are discussed. The author does not discuss Open Money (see my comment for a link to my keytone at Gnomedex) or Yochai Benckler's [[ASIN:0300125771 The Wealth of Networks: How Social Production Transforms Markets and Freedom].
+ I especially like the way the author discussed how the poorly-paid border patrol and coast guard employees have made their own peace with the drug dealers--they have the same understanding the CIA clandestine service has with the KGB and local counter-intelligence services: we do not kill, kidnap, or even embarrass each other, we all just present to bedoing our job and the only people fooled are Congress and the taxpayers. Similar, the drug dealers understand that if they do not shoot to kill, neither will we....
+ One chapter offers a fascinating study on the impact of sexual arousal (a marker for passion). This quote from page 97 is priceless:
"Prevention, protection, conservatism, and morality disappeared completely from the radar screen. They were simply unable to predict the degree to which passion would change them."
+ The author discusses Smart Cards and their ability to impose a restraining influence with emails, I urge one and all to dump their existing ursurous cards and turn to Interra and other similar community-based cards with high social value.
+ We over-value what we own or possess. (I would add, we also over-value credentialing and under-estimate how painfol our rote school system is, which kills creativity by the seventh grade in some of our brightest kids.)
+ Stereotypes influence behavior on both sides of the viewpoint.
+ Placebo effect is real, something the American Medical Association absolutely does not want you to know (see also Alternative Cures: The Most Effective Natural Home Remedies for 160 Health Problems among many excellent works in this area.
+ Options can confuse and divert.
+ There is a pricing effect (very high priced menu item drives folks toward the second most expensive, which they would not have chosen absent the "higher" bracket item)
+ Character costs. USA loses $525 million a year to robberies, and $600 BILLION a year to employee theft (this does not count procrastination and government issues, such as every second IRS employee a complete loser while the others do twice the work).
+ Harvard MBA students participated in a series of tests that conclusively demonstrated that people will cheat if given an opportunity to do so; they will cheat twice as much with "in kind" versus cash opportunities, but they will not cheat "wildly" even if assured of not being caught. See also The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead
+ Religion DOES have a good moral effect, as do honor codes and reminding people of the Ten Commandments from time to time. See Founding Faith: Providence, Politics, and the Birth of Religious Freedom in America for the Founding Father's deliberate mix of securlar tolerant government with a desire for a strong religious aspect to community for precisely this reason.
I can see how some might feel this book is less than they were expecting, but I do not agree. This book may be well-marketed and not the deep social science research that some buyers might have been hoping for, but I for one find it completely satisfactory and well worth my time. The author's crediting of 17 collaborators, and the unique goodness of the end-notes carry the day with me.
See also
The World Cafe: Shaping Our Futures Through Conversations That Matter
Society's Breakthrough!: Releasing Essential Wisdom and Virtue in All the People
Building a Knowledge-Driven Organization
Collective Intelligence: Creating a Prosperous World at Peace
My earlier lists (the first ten or so out of 70) focus on strategy, intelligence, information, and offer many other pointers to useful books somewhat related to the larger universe of cognitive science and decision support.
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