Predictably Irrational: The Hidden Forces That Shape Our Decisions
Why do smart people make irrational decisions every day? The answers will surprise you. Predictably Irrational is an intriguing, witty and utterly original look at why we all make illogical decisions.
Why can a 50p aspirin do what a 5p aspirin can't? If an item is "free" it must be a bargain, right? Why is everything relative, even when it shouldn't be? How do our expectati...more
This book is generally brilliant if you ignore the misogyny. It is a book written by a man about a man's world for men. The "Our' in the title does not include half the world.
The misogny, the putting down of fat women, ugly ones, old ones in this often otherwise insightful and percipient book is making me groan. The a ...more
Here's an example on p. 215: "Iran is another example of a nation stricken by distrust. An Iranian student at MIT told me that business there lacks a platform of trust. Because of this, no one pays in advance, no one offers credit, and no one is willing to take risks. People must hire with ...more
While I am getting more and more inured to this way of analysis of behavioral economics and physchology, these kinds of books are still hard to resist - that is because they do, no matter if they have now become an industry doling out similiar books by the dozens, still stretch our perspecti ...more
Predictably Irrational: The Hidden Forces That Shape Our Decisions is a 2008 book by Dan Ariely, in which he challenges readers' assumptions about making decisions based on rational thought.
Ariely explains, "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 there by presenting a wide range of scientific experiments, findings, and ...more
Dan Ariely's book, "Predictably Irrational", offers a clear and comprehensive overview of thi ...more
According to the author of Predictably Irrational, we live simultaneous in the world of social norms and the world of market norms. Social norms are the exchanges and requests we make as part of personal connections. Market norms are the dollar-defined exchanges of dollars, wages, rents, prices. Here's where it gets interesting:
"In the lasts few decades, compa ...more
This book is tops. There are enough reviews here singing its praises already. I shall simply end with some notes for my own record(view spoiler)[
Explores the ability of a decoy option to determine outcomes.
(The economist subscription, travel to rome or france w/free breakfast)
Our first experience becomes our anchor point that future instances are pegged to and rebound towards like a rubber band.
Anchor points are hard to change, but new anchor points can be created wholecloth by giving people a new experience (starbucks vs. dunkin donuts)
The power of FREE! to disguise the actual cost we pay. The difference between 0 and 1 is ...more
Each chapter has several experiments that pertain to a topic.
Chapter 1: The Truth about Relativity: Why Everything ...more
However, the text is not without its flaws. For instance, some of the breathlessly-reported "surprising" results aren't all that surprising or even controversial. For instance, the effect of ...more
The most important lesson I learned from Ariely is the high cost of free. The biggest example is "free shipping." Companies only offer you free shipping to convince you to spend at least the minimum amount to get it. Something to think about the next time I shop online.
Many of Ariely's lessons on psychology were already explained to me in previous books, but that isn't a strike against him. It just shows that maybe humans aren't as ...more
-If you're ever going to a bar, trying to score a little bit of lovin', bring a friend who looks very similar to you - only a little uglier. That way you'll look like the ideal candidate, not just compared to your friend but to everyone else there.
-People are more likely to steal things once removed from cash than cash - ie. the Enron crew who stole millions of dollars from the retirement pensions of little old ladies, but would they ever have snatched 1 ...more
The simplest start is to take issue with the premise, which is simply that the model of a 'rational actor' as defined in classical economics is ridiculous for two reasons: one because of how irrational we are naturally, but also that the degree of our irrationality is so pervasive as to be testable and demonstrable in a way that studies that prove it are easily replicated. This is good. Data replication is crucial. It's a shame that this stubborn notion of a 'ra ...more
Whether you are into behavioral economics or not, whether there are better books than "Predictably Irrational" out there or not, it is still a must read I feel. For one, it is less economics and more behavioral psychology (this would be considered good or bad depending on your expectations though). Two, about 50% of the experiments that the Author carries out and talks about at length in the book are fascinating and eye-opening. The rest of them, not so much. Three, the book makes you realize ho ...more
I don't agree that everything the author ...more
Hopefully some of the self-realizations will carry forward.
Yes, humans see credit differently than cash. Ariely uses that premise to show how easy it is for companies such as Enron to steal vast sums without feeling the same as a mugger taking money from an old lady's purse, despite the end result being the same.
People are ...more
On a somewhat tangential note, he lists the Ten Commandments in an appendix (after noting a study on how listing as many as you ...more
Dan Ariely is the James B. Duke Professor of Behavioral Economics at Duke University. He also holds an appointment at the MIT Media Lab where he is the head of the eRationality research group. He was formerly the Alfred P. Sloan Professor of Behavioral Economics at MIT Sloan School of Management.
Dan Ariely grew up in Israel after birth in New York. He served in the Israeli army and ...more