Predictably Irrational: The Hidden Forces That Shape Our Decisions [DECKLE EDGE] (Hardcover)

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Editorial Reviews

From Publishers Weekly

Irrational behavior is a part of human nature, but as MIT professor Ariely has discovered in 20 years of researching behavioral economics, people tend to behave irrationally in a predictable fashion. Drawing on psychology and economics, behavioral economics can show us why cautious people make poor decisions about sex when aroused, why patients get greater relief from a more expensive drug over its cheaper counterpart and why honest people may steal office supplies or communal food, but not money. According to Ariely, our understanding of economics, now based on the assumption of a rational subject, should, in fact, be based on our systematic, unsurprising irrationality. Ariely argues that greater understanding of previously ignored or misunderstood forces (emotions, relativity and social norms) that influence our economic behavior brings a variety of opportunities for reexamining individual motivation and consumer choice, as well as economic and educational policy. Ariely's intelligent, exuberant style and thought-provoking arguments make for a fascinating, eye-opening read. (Feb.)
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Review

From The New York Times Book Review
"Obviously, this sly and lucid book is not about your grandfather’s dismal science…. Predictably Irrational is a far more revolutionary book than its unthreatening manner lets on. It’s a concise summary of why today’s social science increasingly treats the markets-know-best model as a fairy tale….he and his fellow social scientists want to replace the "rational economic man" model with one that more accurately describes the real laws that drive human choices."

From USA Today
"Surprisingly entertaining. . . . Easy to read. . . . Ariely’s book makes economics and the strange happenings of the human mind fun."

More Praise for Predictably Irrational
"A marvelous book that is both thought-provoking and highly entertaining, ranging from the power of placebos to the pleasures of Pepsi. Ariely unmasks the subtle but powerful tricks that our minds play on us, and shows us how we can prevent being fooled."
Jerome Groopman, Recanati Chair of Medicine, Harvard Medical School,and New York Times bestselling author of How Doctors Think

"Dan Ariely is a genius at understanding human behavior: no economist does a better job of uncovering and explaining the hidden reasons for the weird ways we act, in the marketplace and out. Predictably Irrational will reshape the way you see the world, and yourself, for good."
James Surowiecki, author of The Wisdom of Crowds

"Filled with clever experiments, engaging ideas, and delightful anecdotes. Dan Ariely is a wise and amusing guide to the foibles, errors, and bloopers of everyday decision making."
Daniel Gilbert, Professor of Psychology, Harvard University, and New York Times bestselling author of Stumbling on Happiness

"This is going to be the most influential, talked-about book in years. It is so full of dazzling insights--and so engaging--that once I started reading, I couldn’t put it down."
Daniel McFadden, 2000 Nobel Laureate in Economics, Morris Cox Professor of Economics, University of California at Berkeley

"Predictably Irrational is wildly original. It shows why--much more often than we usually care to admit--humans make foolish, and sometimes disastrous, mistakes. Ariely not only gives us a great read; he also makes us much wiser."
George Akerlof, 2001 Nobel Laureate in Economics, Koshland Professor of Economics, University of California at Berkeley

"The most difficult part of investing is managing your emotions. Dan explains why that is so challenging for all of us, and how recognizing your built-in biases can help you avoid common mistakes."
Charles Schwab, Chairman and CEO, The Charles Schwab Corporation

Book Description
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, even when our stomachs are already full?

And how did we ever start spending $4.15 on a cup of coffee when, just a few years ago, we used to pay less than a dollar?

When it comes to making decisions in our lives, we think we're in control. We think we're making smart, rational choices. But are we?

In a series of illuminating, often surprising experiments, MIT behavioral economist Dan Ariely refutes the common assumption that we behave in fundamentally rational ways. Blending everyday experience with groundbreaking research, Ariely explains how expectations, emotions, social norms, and other invisible, seemingly illogical forces skew our reasoning abilities.

Not only do we make astonishingly simple mistakes every day, but we make the same types of mistakes, Ariely discovers. We consistently overpay, underestimate, and procrastinate. We fail to understand the profound effects of our emotions on what we want, and we overvalue what we already own. Yet these misguided behaviors are neither random nor senseless. They're systematic and predictable—making us predictably irrational.

From drinking coffee to losing weight, from buying a car to choosing a romantic partner, Ariely explains how to break through these systematic patterns of thought to make better decisions. Predictably Irrational will change the way we interact with the world--one small decision at a time.

About the Author
Dan Ariely is the Alfred P. Sloan Professor of Behavioral Economics at MIT, where he holds a joint appointment between MIT's Media Laboratory and the Sloan School of Management. He is also a researcher at the Federal Reserve Bank of Boston and a visiting professor at Duke University. Ariely wrote this book while he was a fellow at the Institute for Advance Study at Princeton. His work has been featured in leading scholarly journals and a variety of popular media outlets, including the New York Times, the Wall Street Journal, the Washington Post, the Boston Globe, Scientific American, and Science. Ariely has appeared on CNN and National Public Radio. He divides his time between Durham, North Carolina, Cambridge, Massachusetts, and the rest of the world. -- Praise for Predictably Irrational

"Sly and lucid. . . . PREDICTABLY IRRATIONAL is a far more revolutionary book than its unthreatening manner lets on." -- New York Times Book Review

See all Editorial Reviews

Product Details

• Hardcover: 304 pages
• Publisher: HarperCollins; 1 edition (February 19, 2008)
• Language: English
• ISBN-10: 006135323X
• ISBN-13: 978-0061353239
• Product Dimensions: 9.3 x 6.4 x 1.4 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 4.2 out of 5 stars  See all reviews (299 customer reviews)
• Amazon.com Sales Rank: #4,903 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

215 of 240 people found the following review helpful:

5.0 out of 5 stars Welcome to the fuzzy world of being human., February 19, 2008

By	D. Stuart "Researcher at Kudos" (Auckland NZ) - See all my reviews

Dan Ariely is the guy you'd want at your dinner party. He's witty, smart and also very inclusive - sharing his passion for the way humans tick in a way that makes us feel great about the fact that, rational as we like to think we are, we make bad snap decisions, we cheat and we get ruled by our heart precisely when the facts are screaming "go the other way!" There's a lot in this writing which celebrates our human-ness. Why do we do this?
What Ariely has done here is shift a lot of the thinking developed by such pioneers as Kahneman & Tversky who worked in behavioural economics, and moved it into the everyday sphere. And he's done a great, insightful job. Where the behavioural economists are focused on financial decisions (why we buy high and sell low - and confound the assumptions of the classic economists who assume 'the rational man,) Ariely eschews the technical language and walks us through everyday examples of our often fuzzy and quite irrational decision-making.

The result is utterly engaging - and this easy 300 page read still has academic rigour and strong foundations. Ariely cites many experiments and examples, and shows that we often get things wrong because we frame things the wrong way, mis-judge probabilities, apply heuristic rules of thumb that don't always work, or we just plain let our emotions rule.

We love to think that we're educated, rational and moral. Yet who hasn't overestimated the upside on a sure-fire investment, bought some clothing that we knew was a mistake even as we bought it, or got our wires crossed between work-rules and social rules? This book is fascinating, entertaining and very, very illuminating.

- Recommended for the general public, but I'd urge marketers, market researchers and business people to read this one carefully. Dan provides excellent dinner-party insights, but they apply to our real world and explain why so many poor decisions are made - whether by customers or by the 'rational' business people who make million-dollar decisions.

- Recommended companion book: Nudge: Improving Decisions About Health, Wealth, and Happiness here one of the godfathers of behavioural economics discusses the way we can manage the "choice architecture" in our world.

40 of 43 people found the following review helpful:

5.0 out of 5 stars Made me think through some things I'd overlooked about market behavior, June 26, 2009

By	Clay E. Hudgins (Southwest and Southeast USA) - See all my reviews (REAL NAME)

This review is from: Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions (Roughcut)

I have been thinking about economics seriously for nearly 30 years. Classical economics is built to no small degree on the notion that people will generally act in their own best self interest, after rationally and intelligently examining their options. This fit my world view fine in my first career as an engineer (BS and MS in Electrical Engineering).

From my 2nd Career as a Business Development person (MBA), I began to have to deal with people's tendency to not entirely think things through.

Here in this book, we have a professor who runs socioeconomic tests on his MBA students. These students are smart enough, worldly enough, experienced enough, and educated enough to approximate the standard economic assumptions and produce reasonably rational behavior.

Guess what. Even among broad experiments conducted on multiple MBA classes over time, one can predictably pre-bias the outcome of a particular run of a socioeconomic experiment by what seeds you plant in the class members' minds before the experiment. For example, in one experiment in estimating prices, the author requires his students to write the last two digits of their social security numbers on the top of the paper. Simply the act of writing a high number (e.g., 88) versus a low number (e.g., 08) produced statistically significant correlatable influences on the students' later price estimates. Those compelled to write "88" at the top of their papers would reliably estimate higher prices than those compelled to write "08" at the top of their papers, to a statistically significant degree.

Extrapolating to "real life." Watching Fox News will tend to make you more conservative without you knowing it. Watching MSNBC news will tend to make you more liberal without you knowing it.

If you want to understand "real truth," you are just going to have to do a little more than self-select your news feeds. You are going to have to seriously consider a diversity of viewpoints.

Moreover, if you have Social Darwinist beliefs as I once did, you may need to re-think the concept of the Poverty Trap. Early pre-conditioning really does make a difference.

Here is the way I think of it as an Engineer. Classical Economic Theory is analogous to Classical Newtonian Physics. There is nothing badly wrong with it, and it is a good approximation for most real world problems at the middle of the distribution.

However, General Relativity is indeed more correct that Classical Newtonian Physics, and the additional knowledge makes a real difference in certain special cases. And, those special cases are sometimes the really important ones. Likewise, Behavioral Economics is adding something very valuable to our knowledge of Classical Economics.

Read this only if you are brave enough to contemplate that the world might be a little more complex than we wish it were.

26 of 28 people found the following review helpful:

4.0 out of 5 stars `Think how hard physics would be if particles could think.', July 25, 2008

By	J. Cameron-Smith "Expect the Unexpected" (ACT, Australia) - See all my reviews (TOP 500 REVIEWER)    (REAL NAME)

While it is comforting to know that so many decisions are made on from irrational bases, it is discomforting to be made quite so aware of it. No, I take that back: it is quite reassuring to know that while the principles of logic have their place, people are influenced by other factors.

Professor Ariely explains some of the factors that influence our decisionmaking: from the influence of emotions to the sometimes agonising choice between options; the pitfalls of procrastination and the lure of free offers. And why is it that we are often perfectly willing to do something for nothing, but not if payment is involved? From the discussion of the creation of a market for black pearls through discussion of types of dishonesty, Professor Ariely provides insights into human behaviour, in many cases backed by experiments that have tested his hypotheses.

This book is primarily focussed on behavioural economics, but I would argue that it would be of interest to a far wider group of readers. We are all decisionmakers and our decisions impact on others. I believe that many of us with a specific interest in public policy or management, in marketing, or in human behaviour more generally would find value in reading this book. While many of the concepts are profound, the subject matter is presented in a readable and entertaining way.

Jennifer Cameron-Smith