Book Review, Books

Predictably Irrational

Genre: Non-Fiction, Behavioral Economics, Human Nature

My goal, by the end of this book, is to help you fundamentally rethink what makes you and the people around you tick. I hope to lead you thereby presenting a wide range of scientific experiments, findings, and anecdotes that are in many cases quite amusing. Once you see how systematic certain mistakes are — how we repeat them again and again — I think you will begin to learn how to avoid some of them. — Dr. Dan Ariely

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 over $5 on a cup of coffee when, just a few years ago, we used to pay less than half of it? 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?

Standard economic theory assumes that we are rational, but we are not. Most of the time, we’re deeply irrational. Just because we’re irrational, however, it doesn’t follow that we’re chaotic. Our behavior isn’t random. As a matter of fact, we make the same mistakes over and over again, and there is nothing random about that. There are predictable patterns in our behavior. We have instincts that help us negotiate a complex world, and these instincts tend to channel us into repetitive behavior so that we don’t have to spend a lot of time making decisions about things that aren’t essential to our survival. 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.

In Predictably Irrational: The Hidden Forces That Shape Our Decisions, Dr. Dan Ariely looks at self-defeating behavior, the power of suggestion, of procrastination, the effects of placebos, and many other aspects of our lives that we are often unaware of. Delusions and self-rationalizations lurk behind many of our actions, subtly undermining our best interest. Only until we learn and understand how our primordial passions steer our lives can we regain control. Without this awareness, we are often at the mercy of advertisers and others who know how to use these hidden mechanisms to manipulate our behavior. In a series of illuminating, often surprising experiments, MIT behavioral economist 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.

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” tries to change the way we interact with the world — one small decision at a time.

The Good

  • If I had to review this book in one word, I would say “thought-provoking”.
  • Every chapter delves into a new question or new arena and he backs it up with fun experiments he conducted at MIT or other universities in the US.
  • I also liked Dan for his occasional humor, and the fact that he came back from a severe burn injury is inspiring.
  • The ability of Ariely and colleagues to devise really neat experiments to test their hypotheses. All of the conclusions in the book are convincingly supported by often remarkably clever experiments.

The Bad & Ugly

  • Ariely seems to enjoy telling stories. Where one or two examples might suffice to explain his thoughts, Ariely uses five. While some readers may enjoy his meandering storytelling style, others may wish that the author would hurry up and reach his point.
  • Over-generalized, far-reaching conclusions based on small sample sizes. I understand that it is very difficult for Behavioral Economists to run experiments on people from different cultures, different ethnicities, and different countries. But “behavior” I believe, is tied somewhat close to one’s culture, upbringing, where they currently reside & work, etc. What is “normal/rational” for an American consumer might be very different than what is normal for an Indian consumer — even though both have equal buying power.

Favorite Quotes

  • We usually think of ourselves as sitting the driver’s seat, with ultimate control over the decisions we made and the direction our life takes; but, alas, this perception has more to do with our desires-with how we want to view ourselves-than with reality.
  • Ownership is not limited to material things. It can also apply to points of view. Once we take ownership of an idea — whether it’s about politics or sports — what do we do? We love it perhaps more than we should. We prize it more than it is worth. And most frequently, we have trouble letting go of it because we can’t stand the idea of its loss. What are we left with then? An ideology — rigid and unyielding.
  • Giving up on our long-term goals for immediate gratification, my friends, is procrastination.
  • That’s a lesson we can all learn: the more we have, the more we want. And the only cure is to break the cycle of relativity.

Fun Fact

The author is a professor who was injured in an explosion in Israel. He suffered severe burns and 5 years of therapy. He used this “downtime” to ponder the why’s and how come’s of life.

Thank you for reading. Hope to see you in the next one. Till then, don’t forget that you’re amazing.

Share on facebook
Share on twitter
Share on linkedin

Related Articles