Trevor's Reviews > Predictably Irrational: The Hidden Forces That Shape Our Decisions

Predictably Irrational by Dan Ariely
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Oct 09, 2008

it was amazing
bookshelves: behavioural-economics, social-theory, science

It is important that you move this one up your list of books that you have to read. This is a particularly great book. My dear friend Graham recommended I read this book. He has recommended four books to me – and the only one I couldn’t finish was “My Cousin, My Gastroenterologist: A novel” by Mark Leyler – but he did recommend, “The Tetherballs of Bougainville” also by Leyler and that is still one of the most remarkable books I’ve ever read. I haven't written a review of that book, but where the hell would I start?

When I’m reading books I often think – you know, I would like to re-write this. I would cut out a lot of the fluff and perhaps change the voice a bit, add some cellos, perhaps even a bassoon (there is nothing that can’t be improved with some cellos and a bassoon). But not this book. I really, really liked this book.

This is a companion to Freakonomics – except I liked this one even more. Which reminds me that I must look how many stars I gave that one so that I can give this one more… If I am going to be irrational I might as well work at being consistently irrational.

Which is the point of this book. Economic Rationalism – otherwise known as the nonsense that got us into this mess – holds that the world is full of rational economic units and you are just one of those units. We always know what is good for us, we are free to choose what we need and we invariably make the choices that reflect our best interests. The absurdity of this view is being played out as I type with the world financial markets in meltdown and with the new Prime Minister of Japan saying today – “Honestly, this for us is beyond our imagination. We have huge fears going ahead," Which I believe is Japanese for, “The fundamentals are all in place. We have nothing to worry about.”

Like Freakonomics this presents a series of experiments to show how we behave under various circumstances in ways that are both less than rational and yet perfectly predictable. I’m going to have to spoil bits of this book, but just to show you how wonderful it is and why you need to run to your local purvayour of tantalising texts to obtain your copy of this fine book.

I guess one could group a lot of the experiments in this book under the general title of Placebo Effect. This makes two books in a row in which the Placebo Effect has been given a starring role and I’m, quite frankly, in seventh heaven. One of the questions this book seeks to answer is whether social stereotypes have an impact on a person’s performance. THIS IS THE SPOILER – SO LOOK AWAY IF YOU MUST.

What do we know? Well, we definitely know that all Asians are brilliant at mathematics. This is as true as the fact that anyone with an English accent is a mass murderer – or at least, that is definitely true in that strange world that is American movies and IRA propaganda. The other thing you know about mathematics is that all women are hopelessly, pathetically, mathematically inept. What is it about that Y chromosome?

You might have noticed that the particular Venn Diagram I am describing here has a rather interesting intersection – that is, woman who have a preference for thinking of themselves as Asian. Let’s see if we can’t mess around with the minds of this particular sub-set of humanity.

We are going to give them a bit of a maths test in a minute – but before we do, let’s ‘prime’ them. Let’s ask half of them some questions related to them being Asian (not too obvious, let’s just ask questions like how many languages do you speak, what is your migrant experience – you know, vague enough so we aren’t directly saying “THINK ASIAN, THINK ASIAN” at them, but actually, when you think about it a little bit, that is exactly what we are doing). The other half we will ask questions that make them think about themselves being female – when was the last time you bought Cosmo or ‘Are those really your nails?’

Anyway, then you give them the maths test. And guess what? The Asians who have been primed to think of themselves as women did worse on the test than the women who were primed to think of themselves as Asians.

When I hear things like that a shiver runs down my spine. I know I have learnt something incredibly important and something I’m going to have to think about for days and days and weeks. And this book is over-flowing with exactly that kind of idea. The sort of thing that makes you go – shit, who’d have thought?

I mean, which other book have you read lately that asks a MIT student if he would be willing to have sex with a sheep while he is masturbating to images of naked women displayed on a Mac laptop covered in Glad Wrap? Actually, don’t answer that.

The stuff in this book about stealing and its relationship to money is so interesting I can only just stop myself not telling you about it. We used to have a President of the Liberal Party (don’t be confused by the name, the Liberals here are as far right as the Republicans in the US) called John Elliot who basically stole – never tested in court (but then, he was rich and politically well connected) $66 million and was released on a technicality. Yet another of our Corporate Magnates, Richard Pratt, recently was able to steal $300 million from the Australian people and only had to repay $36 million. This time his crime was tested in court, but he is still seen as some sort of corporate hero here, rather than the thief that he is. How is this possible? Well, this book will help you understand and perhaps even help you see what we can do about these abominations.

I loved this book. It is a romp and the guy telling the stories is just the nicest person to be around while he chats away to you. Okay, sometimes I got a little annoyed with the “You’ll never guess what happened” – style – but this was such a minor criticism I feel petty bringing it up.

A large part of what I do in life involves negotiating stuff – actually, that is also true of you too, it is just that the negotiations I’m involved in are more up front than the ones you probably do day by day. As much as I don’t like to admit this, this book taught me things about negotiating that I ought to have known before. Not since Getting to Yes have I read a book quite as worthwhile or one that made me re-think stuff I do in quite the same way. I hope to be able to say in six months time that I’m still considering the implications of some of the ideas in this book – if I’m not, then more is the pity for me.

You’ve been told. What the hell are you waiting for?

Oh, except you Tina – you are the only person in the world I wouldn’t recommend buy this book. When was your birthday again?
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Comments (showing 1-32 of 32) (32 new)

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message 1: by Meen (new)

Meen The Asian vs. female thing is fascinating!

This might be my favorite of your reviews, Trevor. Wait, I think I say that on all of your reviews! I laughed in too many places to even bother repeating them in this comment.


Trevor Thank you both - I can't begin to tell you how delighted both of these comments made me.


message 3: by Meen (new)

Meen Hey, that's what review groupies are for, Trevor!

;)


message 4: by Wendy (new) - added it

Wendy O..my! Gosh, Trevor, I thought I was your only review groupy! Darn.
wendy


message 5: by Meen (new)

Meen Nope, there's more! We should call ourselves something! (Other than Trevor's Review Groupies. Well, I guess that's OK, too.)


Helen (Helena/Nell) OH BOY what a fantastic review. Who could NOT read this book...?


message 7: by Meen (new)

Meen Helen, you wanna join Trevor's Review Groupies?


Trevor Nell got me onto this site - she is my guide and mentor and 'the loveliest woman born out of the mouth of Plenty's horn' as one of the Irish poets noted in passing.

I thank you all with much love and affection.


message 10: by Tina (new)

Tina Titcombe Trev, I loved Freakonomics and only read it because I read your review and was hooked. Your reviews seem to have a way of inspiring people to read and enjoy these books that they might not have thought of reading (or even knew that the books were out there in the first place) or is that just me! You have me hook, line and sinkered with this one and I can't wait to read it, thank you big bro. PS: I want to join your band of groupies too!!! PPS: Your niece is sitting on my lap reading out all the words she knows on the screen, see you even inspire her to read!


Trevor Sorry you didn't like the review, Jim - unfortunately tangential baggage is my speciality. I hope you find a reviewer you prefer. Best of luck.


message 12: by Tina (new)

Tina Titcombe Trev, I know I said that I couldn't read this book because I didn't like the way Dan Ariely treated his reader like an idiot who needed told over and over again something that was very obvious, but I put the book down and picked it up again recently to give it another go, skipped the first chapter, lowered my expectations and have now found that the book isn't to bad. As normal I find these books that try to explain human behaviour don't go far enough in letting us know how we can change this behaviour, but just touch on why we do things.(Except for Malcolm Gladwell of course he doesn't expect you to read his book to change anything just to explain why or how we do things or get were we are going.) Thank you for buying this book for me for my birthday last year I am enjoying reading it like you knew I would. Would like to comment on a book you have written though, maybe soon, cant wait!!!!


Trevor Excellent, I knew you would like it, Sis.

I think knowing the types of mistakes and biases we are likely to make in our all-too-human way is possibly as good as the advice is likely to get with this stuff.

I still think about that Asian woman maths thing. Since reading this book I've also found out that if you remind people of colour in the US that they are people of colour they will, as a group, invariably do worse in a test of intelligence than if you don't remind them. Is it in this book that he talks about young people walking more slowly and more carefully after doing a word test with lots of words about being old and frail? I don't normally have much faith in that 'think and grow rich' type shite, but the negative version of it really is something we would do well to think about.


message 14: by Tina (new)

Tina Titcombe I suppose thinking for one's self and making your own choices in life is what make's us all unique or the same. Sometimes though I would just like to not have to think about it and let someone else do the thinking for me, must be because I have to think for too many other people at the moment. It is a pity that all the put downs these people face in their everyday life's makes them under achieve when reminded of the obvious instead of them standing tall and embracing their talents or say stuff that I'm as good as anyone else, but I can understand how they fell and it can work the same way with anyone you put down. I haven't finished the book yet but am enjoying it, I dont agree with some of his theories but if we all agree with everything that is written life would be boring.


Richard More empirical data.

See this article from the New York Times: How Online Retailers Read Your Mind.

Quoth:
What can you do to resist this influence over the Internet? Not much.

“This is all happening below the level of awareness,” Dr. Mitchell said. “I study it and I am vulnerable to it.”



Trevor How we decide talked about this stuff too, though not in as much detail about online shopping, more about credit card shopping (which I think this book also discussed, but it is a while now since I read it and would need to check). I doubt Australians would subconsciously associate green with money - simply because none of our money is really green. But that said, it would be interesting to know what the differences would be here in Australia. I'm reading a fantastic book - Why We Make Mistakes How We Look Without Seeing, Forget Things in Seconds, and Are All Pretty Sure We Are Way Above Average and it has lots of experiments I've never read about before. Some of them are making my head spin. But there are some photos of candidates for US elections and you have to pick which one looks most competent. I would love to see if you would get the same results in Australia for the pairings - in the book the guy mostly selected in the US looks a bit too American (at least to me) to have a chance here in an Australian election. I know that doesn't make much sense, but it is as best as I can describe it.


message 17: by Whitaker (new)

Whitaker Trevor, I think I going to have to tag you as "guy most likely to recommend a book that I want to read". :-)


Trevor I'm annoying everyone around me at the moment by reading out bits of Why We Make Mistakes, Whitaker - this is the book most likely to be recommended by the bloke most likely to recommend books - well, this week anyway. I'm still only half way through and if I have one criticism it is that it doesn't really seem to answer the question it asks in its title, but it does have many, many examples of the kinds of mistakes we are likely to make.


message 19: by Ryan (new) - rated it 5 stars

Ryan Thank you very much for putting me onto this boom Trevor. I saw there was a TED talk by him and immediately went out to buy this book. Took me a while to finish (savoring, chasing down interesting tidbits, general life stuff) but I am very glad I did. I have shared this book with many friends and discussed it's contents with pretty much whoever was willing to sit still long enough. Do you have a follow up recommendation? Perhaps some Gladwell or Thinking slow and fast?


message 20: by Ryan (new) - rated it 5 stars

Ryan Please excuse grammar and spelling (boom instead of book*) I am writing on my phone.


Trevor Yes I've forced this on lots of people too. Outliers Is Gladwell's best. I really enjoyed that. Dane's got a new one out too. But I haven't read or even seen it yet. Glad you enjoyed this


message 22: by Ian (new) - added it

Ian Vinogradus Great review, Trevor.

I wasn't aware until I did some googling just how Australian a term "economic rationalism" seems to be. Witness the Wiki article and this article by John Quiggin:

http://www.uq.edu.au/economics/johnqu...

I guess I would have two responses to the concept of the economic rationalism of the market.

The first is that it doesn't mean that anybody actually acts rationally. Everybody acts in their own self-interest or selfishly as individuals. At a collective level, it is assumed that the outcome is somehow balanced or averaged out and therefore rational.

The second is that it begs the question, "rational towards what end?"

The market might ultimately rationally pursue economic values such as profit and capital.

It doesn't necessarily pursue 100% employment or job satisfaction or quality or any particular social values.


Trevor Yes, I think that is all right, Ian - the rationality is linked to self-interest. So, you just need to show that people will act in terms of their own self interest in order for the prediction of the standard economic model to work. But books like this one and Thinking Fast and Slow show that we not only don't act against our own self interest often, but we act predictably against our self interest. I think this whole Behavioural Economics stuff is interesting, and not least because of the challenge it presents to the standard justifications economics provides for unencombered free markets. Nudge - another book on a similar theme written by people who see themselves as free market types - also provides interesting questions about what we should do to encourage people to make decisions more in keeping with their long term rational interests.

The internet here is terrible, I'll check your link when I get home.


message 24: by Mohit (new) - added it

Mohit I like your reviews..
mostly made me pick this one up!


Trevor Thanks Mohit - I really enjoyed this book - Let me know if you enjoy it.


message 26: by Ramji (new) - added it

Ramji Shukla I am a new reader n I am interested more in reading non-fiction books. This is a great review and am adding it to my "to read" list. Thanks :) for writing.


Shubham Agarwal trevor have you read any of Nassim Nicholas Taleb's book or Drunkard's walk ?
They are not exactly behavioral eco. but talk about randomness in decision making.


Trevor I've only read one of Taleb's - Fooled by Randomness - which I thought was a remarkably good book and have recommended it to many people. I also enjoyed Drunkard's Walk.

My reviews are here:

https://www.goodreads.com/review/show...

https://www.goodreads.com/review/show...


Jonathan Perez Hey Trevor, love your paragraph ending with "Actually, don’t answer that" lol, exactly what I thought too. Nice book indeed, loved its humor and style. Cognitive biases are indeed an interesting topic.


Trevor He has written a few others, Jonathan, but this is by far his best.


message 31: by Jey (new) - rated it 5 stars

Jey Kalimuthu Hi Trevor, I was looking for books about irrational decisions and was thinking of reading books that would impact my decision making or thought process. This was initiated after reading the book "The Art of Clear Thinking" by Rudolf Flesch. The book was one of the best I've ever read, even if I based it on the quality of writing and the way the book is structured. As I searched for other books that would help me I found your reviews and this one caught my eye. I'm hoping to get back to you after I've finished reading it.


Trevor I've added the Flesch - I wonder if he's the guy that came up with the reading scale, sort of lexical density for dummies? The best book, but it might be hard to get, is The Psychology of Judgment and Decision Making. Most of the other books on this topic basically steal shamelessly from that.


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