Predictably Irrational: The Hidden Forces That Shape Our Decisions

by Dan Ariely

most people don't know what they want unless they see it in context. We don't know what kind of racing bike we want—until we see a champ in the Tour de France ratcheting the gears on a particular model.

most people don't know what they want unless they see it in context. We don't know what kind of racing bike we want—until we see a champ in the Tour de France ratcheting the gears on a particular model.

we are always looking at the things around us in relation to others. We can't help it. This holds true not only for physical things—toasters, bicycles, puppies, restaurant entrées, and spouses—but for experiences such as vacations and educational options, and for ephemeral things as well: emotions, attitudes, and points of view.

we are always looking at the things around us in relation to others. We can't help it. This holds true not only for physical things—toasters, bicycles, puppies, restaurant entrées, and spouses—but for experiences such as vacations and educational options, and for ephemeral things as well: emotions, attitudes, and points of view.

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.

Mark Twain once noted about Tom Sawyer, “Tom had discovered a great law of human action, namely, that in order to make a man covet a thing, it is only necessary to make the thing difficult to attain.”

When Howard Shultz created Starbucks, he was as intuitive a businessman as Salvador Assael. He worked diligently to separate Starbucks from other coffee shops, not through price but through ambience. Accordingly, he designed Starbucks from the very beginning to feel like a continental coffeehouse.

With everything you do, in fact, you should train yourself to question your repeated behaviors. In the case of the cell phone, could you take a step back from the cutting edge, reduce your outlay, and use some of the money for something else? And as for the coffee—rather than asking which blend of coffee you will have today, ask yourself whether you should even be having that habitual cup of expensive coffee at all.*

Socrates said that the unexamined life is not worth living. Perhaps it's time to inventory the imprints and anchors in our own life. Even if they once were completely reasonable, are they still reasonable? Once the old choices are reconsidered, we can open ourselves to new decisions—and the new opportunities of a new day. That seems to make sense.

For those of you who are not chocolate connoisseurs, Lindt is produced by a Swiss firm that has been blending fine cocoas for 160 years. Lindt's chocolate truffles are particularly prized—exquisitely creamy and just about irresistible.

There's no visible possibility of loss when we choose a FREE! item (it's free). But suppose we choose the item that's not free. Uh-oh, now there's a risk of having made a poor decision—the possibility of a loss. And so, given the choice, we go for what is free.

“The most expensive sex is free sex.”

How could zero dollars be more attractive than $30? When money was mentioned, the lawyers used market norms and found the offer lacking, relative to their market salary. When no money was mentioned they used social norms and were willing to volunteer their time.

The conclusion: no one is offended by a small gift, because even small gifts keep us in the social exchange world and away from market norms.

Indeed, just thinking about money makes us behave as most economists believe we behave—and less like the social animals we are in our daily lives.

SO WE LIVE in two worlds: one characterized by social exchanges and the other characterized by market exchanges. And we apply different norms to these two kinds of relationships. Moreover, introducing market norms into social exchanges, as we have seen, violates the social norms and hurts the relationships. Once this type of mistake has been committed, recovering a social relationship is difficult.

when a social norm collides with a market norm, the social norm goes away for a long time. In other words, social relationships are not easy to reestablish. Once the bloom is off the rose—once a social norm is trumped by a market norm—it will rarely return.

Medical benefits, and in particular comprehensive medical coverage, are among the best ways a company can express its side of the social exchange.

MONEY, AS IT turns out, is very often the most expensive way to motivate people. Social norms are not only cheaper, but often more effective as well.

I was surprised, in fact, to find that Burning Man was the most accepting, social, and caring place I had ever been. I'm not sure I could easily survive in Burning Man for all 52 weeks of the year. But this experience has convinced me that life with fewer market norms and more social norms would be more satisfying, creative, fulfilling, and fun.

Saran-wrapped laptop computer.

the idea of enjoying contact with animals was more than twice as appealing when they were in a state of arousal as when they were in a cold state.

Across the board, they revealed in their un-aroused state that they themselves did not know what they were like once aroused. Prevention, protection, conservatism, and morality disappeared completely from the radar screen. They were simply unable to predict the degree to which passion would change them.*

Robert Louis Stevenson screamed in his sleep in the early hours of an autumn morning in 1885. Immediately after his wife awoke him, he set to work on what he called a “fine bogey tale”—Dr. Jekyll and Mr. Hyde—in which he said, “Man is not truly one, but truly two.” The book was an overnight success, and no wonder. The story captivated the imagination of Victorians, who were fascinated with the dichotomy between repressive propriety—represented by the mild-mannered scientist Dr. Jekyll—and uncontrollable passion, embodied in the murderous Mr. Hyde.

In Freudian terms, each of us houses a dark self, an id, a brute that can unpredictably wrest control away from the superego.

almost everyone has problems with procrastination, those who recognize and admit their weakness are in a better position to utilize available tools for precommitment and by doing so, help themselves overcome it.

When people think about a placebo such as the royal touch, they usually dismiss it as “just psychology.” But, there is nothing “just” about the power of a placebo, and in reality it represents the amazing way our mind controls our body. How the mind achieves these amazing outcomes is not always very clear.* Some of the effect, to be sure, has to do with reducing the level of stress, changing hormonal secretions, changing the immune system, etc.

Adam Smith, the great economic thinker, had a pleasant reply: “Nature, when she formed man for society, endowed him with an original desire to please, and an original aversion to offend his bretheren. She taught him to feel pleasure in their favourable, and pain in their un-favourable regard,”

IF I WERE to distill one main lesson from the research described in this book, it is that we are pawns in a game whose forces we largely fail to comprehend. We usually think of ourselves as sitting in the driver's seat, with ultimate control over the decisions we make 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.