The traditional economic view is that people rationally maximize their benefits while minimizing their costs. Ariely, a leading expert in the field of...moreThe traditional economic view is that people rationally maximize their benefits while minimizing their costs. Ariely, a leading expert in the field of behavioral economics, explores the many ways in which this view breaks down: we may think we’re making rational decisions, but in reality there are many other influences at work. He draws on a wide variety of behavioral experiments to demonstrate these points, discussing things like: • Most people cheat on tests when given the opportunity: but only a little. • Zero isn’t just another price: it exerts special appeal to us and tends to cause us to forget the downside. • We’re more likely to choose something when we can compare its value on relative terms to something else • Once an “anchor” price is established for an item (think suggested retail price), it strongly affects our perception of its value • We’re better at avoiding procrastination when we have externally set firm deadline • We tend to value things more highly when we own them
This is a very entertaining and readable book: despite his academic credentials, Ariely is an engaging writer who clearly explains his hypotheses and experiments, and draws out the conclusions. He goes beyond this, though, to talk more generally about the principles, how they affect daily life, and what we can do to cope with our irrationality. I’d especially recommend this book for people in sales and marketing, and for anybody else who wants to understand the realities of decision making. (less)
If you're looking for literature on behavioral economics and change (as i was), this book won't help you. Their purpose instead is to document the int...moreIf you're looking for literature on behavioral economics and change (as i was), this book won't help you. Their purpose instead is to document the intellectual history of government application of behavioral economics ("libertarian paternalism"), particularly in the UK, but stretching back to US scholars like Herbert Simon, Daniel Kahneman, and Richard Thaler (Nudge).
It would be unfair to criticize the book simply because it wasn't the book i was looking for. But once i determined it didn't match my interests, i bailed out, except for skimming their concluding chapter. So i can't fairly review the book as a whole, except to note the authors' perspective seems to stand clearly against the application of behavioral economics in the political sphere, presumably for philosophical reasons (though if they made that clear, it must be in the parts i skipped).
On a more positive note, their research seems to be carefully documented, and i found the bibliography helpful, as well as the discussions of the Social Brain initiative at the RSA (http://thersa.org), which was new to me. (less)