Saturday, February 23, 2008

Predictably Irrational

Predictably Irrational, by Dan Ariely
$14.17 at Amazon.com
ISBN: 978-0-06-135323-9
We'd like to think that we're usually rational and make smart decisions. Apparently, that's not really the case. Even more surprising: we're usually irrational in the same, predictable ways.
Just how much do we lose when our fleeting impulses deflect us from our long term goals? How much do expectations, emotions, social norms, and other invisible, seemingly illogical forces skew our reasoning abilities?
First, a little bit on the interesting and eminently qualified author. 
When he was eighteen, Dan was injured by a magnesium flare and his body was covered with third-degree burns. He spent the next few years in a hospital, in agonizing pain. This experience caused him to challenge the predominant views on human nature, pain and pleasure, and what we'd consider the rational and obvious. 
He has since become a leader in the field of behavioral economics, which draws on both psychology and economics to explain our judgement and decision making.
Each chapter in this book deals with another way in which our irrationality sometimes gets the best of us. We pay too much, wait in line too long, procrastinate, and overextend ourselves as a result.
For example, one outstanding chapter deals with the word "free!". The idea of getting something for nothing is a source of emotional excitement, but of course nothing is ever really as free as it seems. 
Another discusses the contrast between social and market norms: why we are often happy to do things out of kindness, but less so when we are paid to do them. Social norms are wrapped up in our need for community, while market norms imply comparable benefits and prompt payments. When you are in the domain of market norms, you get what you pay for.
There's a very strange chapter on how being sexually aroused can affect our judgement. You won't believe the crazy experiments that were conducted in this section.
Not only do we make simple and obvious mistakes every day, but we actually make the exact same types of mistakes all the time. Sometimes we seem to make an honest effort to correct our bad behaviors, but just as often we seem to accept our shortcomings even to our own detriment.
Books like this are often dry and hard to get into, but this one was simply irresistible. Funny at times, often thought-provoking, it'll change the way you think about marketing, decision-making, and even the way your own mind works.
From the same tradition as Freakonomics, and just as fun to read, Predictably Irrational is my non-fiction recommendation for the new year!

1 comment:

Sam said...

eeep! Why, I myself review this very book for Open Letters (http://www.openlettersmonthly.com) in only a day, when the March issue goes up! Click on over when the time comes, and see if you think I did it justice!