Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely

Predictably Irrational: The Hidden Forces That Shape Our Decisions

Why do our headaches persist after taking a one-cent aspirin but disappear when we take a 50-cent aspirin?Why does recalling the Ten Commandments reduce our tendency to lie, even when we couldn't possibly be caught?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, eve...

Title:Predictably Irrational: The Hidden Forces That Shape Our Decisions
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Predictably Irrational: The Hidden Forces That Shape Our Decisions Reviews

  • Ryan

    As a social psychologist, I have been trained to scoff at all "behavioral economists" because they often claim to have recently discovered that individuals do not always behave "rationally". Furthermore, they seem to brilliantly deduce that the only way to accurately predict how humans actually behave is to test behavior/decision making empirically. Of course, social psychologists have been doing this for over half a century without much public fanfare or guest spots on "MSNBC" or "CNN" every ti

    As a social psychologist, I have been trained to scoff at all "behavioral economists" because they often claim to have recently discovered that individuals do not always behave "rationally". Furthermore, they seem to brilliantly deduce that the only way to accurately predict how humans actually behave is to test behavior/decision making empirically. Of course, social psychologists have been doing this for over half a century without much public fanfare or guest spots on "MSNBC" or "CNN" every time people want to know how consumers make decisions.

    With this clear bias of mine in mind, this isn't a bad book. Ariely at least gives full credit to Tversky and Kahneman's influence on his work (both psychologists), and he describes his experiments in clear, easy-to-understand language for the non-scientist reader. The big "however" with this book is Ariely's tendency to extrapolate beyond the results of his studies with recommendations concerning public policy and personal solutions for individuals. Not that his advice is necessarily wrong, but it should always be made clear where the data stop and the personal advice begins. I would recommend this book to my non-social psychologist friends.

    My notes and quotes:

    Ariely is a behavioral economist from Israel. Much of his work is closely related to Tversky and Kanneman’s work, although he has taken it in many new directions, but it is usually related to consumer behavior in some way.

    *** He describes how money is often the most expensive way to motivate people. Instead, he suggests using social norms to do so. But he also warns the rules are different when you enter social norms into a relationship as opposed to market norms. The same rules that you use in relationships apply rather than the financial assessment of how much certain behaviors are worth. So if a business tries to develop social norms to increase productivity, they can’t all of a sudden introduce market norms without expecting a decrease in loyalty, etc.

    *** He spends some time talking about the influence of arousal on decision making, or specifically how we believe we will make a particular decision when in cold, rational states than we end up making when we are highly aroused. His specific studies have examined sexual decision making and how people are more than twice as likely to rate their likelihood of engaging in various sexual behaviors as high when they are aroused vs. when they are not. This is highly relevant to things like abstinence training programs and even safe sex programs. The best prevention is to prevent the high level of arousal or the opportunity in the first place, but if arousal does occur to make sure people are trained to have what they need available “just in case”. The same principles apply for the faulty predictions of how we would behave under any emotional or motivational state, such as hunger. Another example is pregnant women not wanting to use pain medication during birth. They make the decision beforehand, but often change their mind once the pain begins because they cannot predict how they will feel during that state. One technique he offers to test this is to have a woman hold her hand into a bucket of ice for two minutes while practicing her breathing. If she is able to handle it without trouble she might be able to handle childbirth more reasonably.

    *** His next section concerns procrastination and various methods of dealing with it. He divided his class into three sections, one where they got to pick their own deadlines, but once they were chosen they were firm; one where the deadlines were firmly established by the instructor; and one where there were no deadlines, they just had to submit their papers by the end of the quarter. The forced deadlines condition did best, the ones who chose their own deadlines did second, and the no deadlines condition performed the worst on the paper. He suggests the development of more external controls that we can select to prevent us from having to face temptation (to procrastinate, to spend, etc.) in the first place. By setting up our own deadlines/goals that are set in stone, we can head off our self regulation tendencies and just follow the designated structure.

    *** His next section relates to when and why people cheat. He found that for many tasks where people are unsupervised, they fail to cheat as much as they possibly can, even when no one will find out, but they almost always cheat a little. This is because in small circumstances like that people don’t really consider what they are doing as wrong. In other words, small infractions don’t typically bring to mind codes of conduct we have available for moral decisions. Instead they just sweep the transgression under the rug without thinking about it. But if people were reminded of a moral code (like the 10 commandments) they wouldn’t cheat at all. The key is to make morality accessible so that the decision will be framed in moral terms. He also suggests oaths and guilds might make ethics in business more likely because people would frame their decisions more on the code of conduct of their organization/profession instead of not really thinking about it.

    *** He continues on with his cheating work, but extends it to the difference between cash and non-cash currencies. When people are playing a game for cash they are much more likely to tell the truth about how much they earned (because the cash is a concrete reminder of how important the decision is) compared to when they play the game for tokens or credit of some kind. The problem is that people think there decisions are always made based on the same moral code regardless of the form of money they use. But in reality, the more concrete and meaningful a currency is, the more likely we are to frame our decisions in terms of market norms, and moral judgment. Some of the examples for non-monetary transactions are wardrobing or returning clothes after wearing them once; expense reports; taxes; insurance overestimations; or stealing anything that isn’t directly related to cash in general.

    *** He ends his book with a website for his book (

    ), and mentions that you can sign up for one of his studies from the site.

  • David

    All classic economic theories are based on the assumption that consumers behave rationally, despite a considerable body of evidence to the contrary. It is only in the last 25 years that economists have begun to investigate the irrational side of consumer behavior. This field of investigation, which started with the pioneering work of Tversky and Kahneman, is usually referred to as

    Dan Ariely's book, "Predictably Irrational", offers a clear and comprehensive overview of thi

    All classic economic theories are based on the assumption that consumers behave rationally, despite a considerable body of evidence to the contrary. It is only in the last 25 years that economists have begun to investigate the irrational side of consumer behavior. This field of investigation, which started with the pioneering work of Tversky and Kahneman, is usually referred to as

    Dan Ariely's book, "Predictably Irrational", offers a clear and comprehensive overview of this fascinating subject. If you are the kind of person (like me) who can't imagine using the words 'fascinating' and 'economics' in the same sentence, don't worry, the primary focus of the book is human behavior and its peculiarities, rather than economic theory. In particular, the author is concerned with elucidating how and why people continue to engage in behavior patterns that are detrimental in the long term.

    In thirteen well-written chapters, Ariely considers such topics as:

    • The effect of our need for a reference point before we can judge the value of something, and how clever marketers can exploit this

    • How we can become trapped by our own behavior - the importance of first decisions

    • How the prospect of getting something free can override reason and logic (is it really smart to wait for free-entrance night at the museum?)

    • The effect of social norms (why you are more likely to agree to help your local charity by working for nothing, than for a quarter of your normal professional rate)

    • The influence of arousal (we behave irrationally in the throes of passion - what you can do about it)

    • The problems of procrastination and self-control

    • Our tendency to place too much value on what we already own

    • The destructive consequences of people's tendency to want to keep as many options open for as long as possible

    • How our expectations of something can actually influence our ability to enjoy it

    • The power of price (response to a $2.50 placebo is better than that to a 10c placebo)

    • In what situations are people particularly likely to behave dishonestly? How can the triggers for dishonest behavior be disarmed?

    The book is based primarily on work that Ariely has done with colleagues at M.I.T. and elsewhere. Two features make the book exceptional, in my opinion:

    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.

    Ariely does an extraordinary job of making his material interesting and accessible to a general audience. The book was a joy to read.

    I highly recommend "Predictably Irrational".

  • Darin

    Ariely is a good writer whose book catches onto the _Freakonomics_ craze by taking a look at times when people make different decisions that typical "laissez faire" economic theories would expect. His book is a fairly easy read and does include some surprising results through social-science experimentation.

    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

    Ariely is a good writer whose book catches onto the _Freakonomics_ craze by taking a look at times when people make different decisions that typical "laissez faire" economic theories would expect. His book is a fairly easy read and does include some surprising results through social-science experimentation.

    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 a "free" item on consumer decision-making is vastly overstated as irrational. This idea is old-hat to most and doesn't make much of a point. More troubling, however, is the unstated difference between this brand of social science and pure economics, and the author states such at the end of the text: the ultimate goal of such discovery is to alter and market certain things that are "beneficial" to most people into "free lunches" which are irresistable to the average Joe.

    Here is where pure economics gets it right: there is no such thing as a "free lunch", no matter what social economics claims. The buck always stops somewhere. If people are going to make "better" decisions about things, someone somewhere is going to decide what "better" is. And if someone else is deciding the terms of this "better", it no longer falls on the individual to do so.

    It is true that human beings cannot always be protected from themselves. If this is true, then this is tenfold true for random human beings (usually via government nannyism) who force "better" upon all people, rational or otherwise. Ariely never tries to face this dilemna, and it weakens the conclusion of the book considerably. This is an entertaining read, and worth your time as a second or third go at _Freakonomics_-like thought, but it doesn't hold a candle to the original.

  • Mary

    This book was somewhat entertaining, but I can't really recommend it. The author does experiments with college students and beer, and extrapolates this into a world view. Most of his applications are anecdotal.

    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

    This book was somewhat entertaining, but I can't really recommend it. The author does experiments with college students and beer, and extrapolates this into a world view. Most of his applications are anecdotal.

    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 within their families, where some level of trust exists. Would you like to live in such a world?" Excuse me, but I prefer to base my world view on more than just the impressions of 1 college student, but this is an example of how he doesn't use logic to come to his conclusions. Here's another tidbit on p. 218 "...drug companies cheat by sending doctors and their wives off on posh vacations." Using Ariely's logic, this means that all doctors are male, or the women doctors are all lesbians with wives. His experiments on cheating have flaws. Since the "cheating" group scored more than the "non-cheating" group, the cheating group MUST have cheated; but they were allowed to destroy their answer sheets. There is no proof that this group cheated; they could have just come from a higher level class, or had more coffee.

    Did you notice how he leads you to the conclusions he wants you to reach? Would an objective researcher characterize one of his subjects as "a clever master's student with a charming Indian accent?" Wouldn't you be more likely to agree with the conclusion than if the participant was a "clever hunchback with an aversion to bathing?" He ascribes all kinds of emotions to his subjects throughout the book. It's not that it isn't worth a read - just realize he's working on your predictability to lead you to his conclusions.

  • Trevor

    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 th

    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

    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?

  • Riku Sayuj

    Written in the tried-and-tested and bestselling tradition of the Malcolm Gladwell books and the Frekonomics clones, Dan Ariely's book too is an entertaining and counter-intuitive look at the world around us.

    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

    Written in the tried-and-tested and bestselling tradition of the Malcolm Gladwell books and the Frekonomics clones, Dan Ariely's book too is an entertaining and counter-intuitive look at the world around us.

    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 perspectives about the things we normally take for granted or think unworthy of a second thought. In that sense then, this book was "unputdownable" and "highly instructive".

    One of my favorite passages from the book is as follows -

    This is in the same wavelength as some of my thoughts on education -

    I am hoping to convert this idea on education into a short story or incorporate it into my ongoing novel. So the book helped me crystallize that thought.

    Sorry for the tangent. Getting back to the book, one more caveat - the author loses the plot a bit in the middle chapters. The beginning chapters about relativity and the power of zero were amusing and fun and the last two chapters on honesty is amazing, but the chapters in between was a bit of a drag.

    Despite my mocking tone and slightly negative review, I will hurry to say that it is a very good purchase for anyone who enjoyed Gladwell's books or others of that genre, and also for marketeers and businessmen and maybe even for policy makers.

    Despite sugar coating the book with the requirements of this genre/industry, Dan does raise some poignant questions about human nature and consumer behavior that is worth pondering over. In the final analysis then, I enjoyed the book and will read it again, and hence, four stars.

  • Caroline

    This is a wonderfully interesting and amusing book. Every time I had a few spare minutes, I would leap back into it with gusto. Some of the things I read I had already seen elsewhere - but much was new to me. The author is described as a behavioural economist.....and I think this book would interest anyone who is interested in psychology.

    This book is tops. There are enough reviews here singing its praises already. I shall simply end with some notes for my own record

    This is a wonderfully interesting and amusing book. Every time I had a few spare minutes, I would leap back into it with gusto. Some of the things I read I had already seen elsewhere - but much was new to me. The author is described as a behavioural economist.....and I think this book would interest anyone who is interested in psychology.

    This book is tops. There are enough reviews here singing its praises already. I shall simply end with some notes for my own record

    , and links to some more of Ariely's work (the TED talks are fantastic!)

    -----------------------------

    (Letters to him from the public and his responses.... He seems to be a sort of agony aunt for The Wall Street Journal.)

    Are we in control of our decisions?

    What makes us feel good about our work?

    Our buggy moral code

    Beware Conflicts of interest

    How equal do we want the world to be? You'd be surprised...

    Predictably Irrational: Basic human motivations

    A great interview with Dan for Valentine's Day 2015, about dating & relationships.

  • Carol.

    Yet another book I'm recommending to Goodreads staff. I will write up a long review when it's done, but I think this is worth chewing on:

    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, compan

    Yet another book I'm recommending to Goodreads staff. I will write up a long review when it's done, but I think this is worth chewing on:

    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, companies have tried to market themselves as social companions--that is, they'd like us to think that they and we are family, or at least are friends that live on the same cul-de-sac. "Like a good neighbor, State Farm is there" is one familiar slogan...

    Whoever started the movement to treat customers socially had a great idea. If customers and a company are family, then the company gets several benefits. Loyalty is paramount. Minor infractions--screwing up your bill and even imposing a modest hike in your insurance rates--are accommodated. Relationships of course have ups and downs, but overall they're a pretty good thing.

    But here's what I find strange: although companies have poured billions of dollars into marketing and advertising to create social relationships--or at least an impression of social relationships--they don't seem to understand the nature of the social relationship, and in particular, it's risks.

    For example, what happens when a customer's check bounces? If the relationship is based on market norms, the bank charges a fee and the customer shakes it off. Business is business... In a social relationship, however, a hefty late fee--rather than a friendly call from the manager or an automatic fee waver--is not only a relationship-killer; it's a stab in the back. Consumers will take personal offense. They'll leave the bank angry and spend hours complaining to their friends about this awful bank. After all, this was a relationship framed as a social exchange."

    No parallels to Goodreads here. Say you have a site that framed itself in social terms. Then when you start applying business decisions to the social sphere, you get surprised that those docile consumers who devoted hours and years to database building (for social rewards) get pissed off and leave to a new site. No parallels at all.

    Full review and analysis at:

  • Petra Eggs

    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

    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 author is trying to prove something we all know, that we (he uses 'we' and 'our' to sound inclusive, but he only means men really) do not make good decisions when sexually aroused. To that end he sets up an experiment where the men, MIT students, will have to answer a set of questions 'sober' and while they are wanking to pictures of buxom young women flashed on their computers.

    The questions include, Would you want to have sex with a really fat woman? An ugly one? A woman over 50? All the undesirable women.

    All these women are put down as sexual objects these really clever guys wouldn't want to have sex with unless they were so aroused by any stimuli they didn't care. That their general powers of discernment and decision-making ie. we don't screw fat,ugly or old women, would go by the board because at that stage they'd screw

    . Also, that in such an aroused state, those clever MIT men, future leaders of technology and business, perhaps even footballers) those men might deliberately get a woman drunk and/or persist in pushy or downright aggressive sexual advances even after she had said 'no' and they wouldn't give a monkeys about using a condom either.

    (Part of me wonders how those men felt who had girlfriends who didn't look like supermodels).

    Personally I think he wrote up the experiment so as he could begin with describing the visual of a cling-film (saran wrap to Americans) wrapped computer (to protect it from splashes of semen) flashing porn and questions and a man 'furiously wanking with his left hand' while propped up on the bed.

    Ok, so I'm predictably irrational about books that slag off my half the human race. You know that I will pick up the misogyny and be compelled to write about it.

  • Pouting Always

    Honestly all the business books that talk about psychological research or behavioral economics talk about the same things. I haven't even read Thinking Fast and Slow by Daniel Kahneman but all these books literally rehash it again and again so I probably wouldn't even get anything out of reading it now. That said this one's much better written than most of the other books I've read and so if you haven't read anything else about behavioral economics or that way we make decisions this is a good ch

    Honestly all the business books that talk about psychological research or behavioral economics talk about the same things. I haven't even read Thinking Fast and Slow by Daniel Kahneman but all these books literally rehash it again and again so I probably wouldn't even get anything out of reading it now. That said this one's much better written than most of the other books I've read and so if you haven't read anything else about behavioral economics or that way we make decisions this is a good choice. If you have read other books on those things though I'd skip this one because it doesn't add anything new.


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