Blame Malcolm Gladwell - but after Blink: The Power of Thinking Without Thinking social psychologists of the type he featured in that book have been coming out of the woodwork to publish in the pop science market in alarming numbers figuring, reasonably, enough that there's a bit of money to be made on the side. I'm guessing royalties from articles in the International Journal of Psychology would pale in comparison.

One of the latest is Dan Ariely, whose unique selling point is a horrific accident he sustained as a student Israel which left him with burns to 70% of his body. His book does what it says on the tin, by way of explaining a number of social experiments that he and his colleagues have run in the last few years, loosely themed around the observation that we don't always act as sensibly as logic would dictate.

Which is fine - as you would expect, some of the examples are eyebrow raising - but it really shouldn't be news and it certainly doesn't require Dan Ariely to tell us that our liberal western societies aren't as rational as we like to think (incontrovertible proof of that, not offered in Ariel's book, being the politicians we elect and the amount of attention and money we collectively devote to cosmetics, fashion, celebrity and professional sport), especially as deeper epistemological examination reveals the idea of "rationality" is incoherent anyway.

But just as some anecdotes are enlightening, the implications of others are not nearly as plain or convincing as Ariel thinks they are, and some of his experiments struck me as being particularly glib, superficial and susceptible to plenty of alternative interpretations.

And what Ariel's book lacks is any further theoretical drive: OK, we re predisposed to behave in silly or odious ways - but what's your point? In what underlying way are our irrational proclivities linked? What conclusions can we draw; what can we learn; what strategies can we adopt to counteract the harmful effects of our fecklessness?

Ariely implies, but doesn't say, that some sort of regulation is required to save us. But given that it was our irrational proclivities by which we arrived at these politicians (and the political institutions through which they organise themselves) I'm not sure he leaves us any better off than when we started.

Olly Buxton

Predictably Irrational is one of several popular books about the way people really make decisions and judgments. This growing sub-genre includes Nudge, Sway and Mistakes Were Made (But Not by Me).

Ariely lucidly explains the findings of various experiments about decision making. It's easy to find applications in marketing: offering options that serve as anchor points and recognizing the power of "free." These findings are useful but I would like to see more discussion of the implications for everyday life.

For example, most of us cannot predict how we will behave when we're swept up by strong emotions. Yet every day judgments are made by jurors in courtrooms based on, "Well, if I were in that situation..."

Ariely points out the futility of taking too long to make certain decisions. One friend kept dithering over the choice of a digital camera, only to forego months of memories captured on film.

Similarly, he feels he took too long to evaluate a job offer from Stanford. But for major life decisions, a lengthy process can be rational, even if you sacrifice current productivity. You have a greater likelihood of identifying the fact or factor that will be the ultimate deal-breaker.

Ariely created an experiment to demonstrate that keeping options open comes with a high cost. So, he says, keeping one job or one residence for a long time can have a high payoff. Maybe. But often outsourcing options or industry shifts will kill a career. As a career consultant, I advise clients to focus on marketability, not security.

Second, Ariely shows that money changes relationship dynamics. As he says, your family would be insulted if you offered to pay for Thanksgiving dinner.

But while he advocates a greater role for social norms (p. 88), money norms often smooth difficult transactions. The New York Times magazine recently featured an article by an unmarried professional woman who needed a kidney. She wished she could just pay for what she wanted instead of being forced into difficult conversations that threatened her friendships.

Many of us who move frequently have learned to pay packers and movers rather than seek help from well-meaning friends. After all, your helper might drop your new high-definition TV on the sidewalk (maybe breaking a toe in the process).

The absence of money also affects relationships. When strangers email to ask how to resolve a challenging career question or fix a troubled website, I often wonder what goes through their minds. When friends ask, they risk the friendship.

Third, Ariely suggests (p 121) that we apply lessons from auto maintenance to motivate individuals to undergo medical exams. This reasoning seems flawed.

Tests won't prolong lives the way regular oil changes prolong the lives of car engines. After a diagnosis of disease, you should consider false positives. You embark on a journey of life-changing (and life-threatening) medical procedures, lifestyle changes, battles with insurance companies and endless waits to deal with rushed, indifferent or even rude medical staff. A better analogy would be to compare medical exams to auto diagnostics (which car owners rarely choose) or else compare teeth cleaning to oil changes.

Insurance creates economic disincentives that muddy the waters. I know several people who had tests that came back negative -- no disease. A few months later, these folks developed symptoms that suggested a need to repeat the tests. In every case, the insurance company said, "No -- you get one a year." One person told me her doctor ruled out her disease based on a test she'd taken a few months earlier. So skipping a routine exam can be rational.

Any benefits of early detection accrue to the individual, not society or insurance companies. Those who stay alive while making ongoing demands on the medical system will cost more than those who are rushed to the hospital in crisis and die shortly afterward.

In any case, Ariely discusses how doctors resist research findings that point to the effectiveness of placebos. Just what is rational thinking, anyway?

Overall, though, I thoroughly enjoyed this book. Ariely's writing entertains as well as informs. We all need to base our decisions and our lives on how human minds really work, not what "everybody" knows.

With this week's headlines about the dizzying volatility of the stock market, we've seen investors jump in and out of the game as they've responded to the most powerful emotions on Wall Street: fear and greed. Surprising? Not if you're Dan Ariely, behavioral economics guru at MIT. This may be the most entertaining econ book you'll ever read, as you laugh at other people's foibles and then wince inwardly as you recognize some of the described behaviors in your own life. It may make you swear off shopping, at least for a while.

The basic premise of the book is that yes, people behave irrationally where money is concerned (thank you, Alan Greenspan!). But Ariely's contribution is to prove, through research so far-ranging it will make you pity his research subjects, a.k.a. Poor Sod Graduate Students, that people behave irrationally in quite predictable ways. We will, for example, almost always report more satisfaction with a product if we know it was expensive--even if that means we give high marks to an ineffective medical placebo. On the other hand, we will also go to ridiculous lengths to obtain any product that is "free," a fact that marketers realize and routinely exploit. That chapter reminded me of the Simpsons episode where Lisa asks Homer in disbelief if he is drinking blood. "Correction!" Homer responds. "Free blood." Bottom line? We'll do just about anything to get something for nothing.

There were a couple of great anecdotes in the book. One was about a company that introduced one of the first bread machines in the world. The trouble was, nobody bought it; people who already routinely made bread at home didn't understand why they would need a machine to help them do it, and those who didn't already make bread weren't about to start. The company's marketing folks hired a consulting firm, which advised them to also introduce a very high-end bread machine to sell right alongside the other. It would have all the bells and whistles and be super-expensive, out of reach for most consumers. The point of this exercise was not to push the high-end model but the basic one, which started to sell like gangbusters. Apparently consumers love and need choice, and they always want to feel they're getting a deal. When faced with the option of the high-end machine, they both a) felt justified in buying the less tricked-out version and b) felt that they were part of a movement that was trendy, exciting, and upper-class. Interesting. It's similar to the phenomenon in fancy restaurants that might have a $40 entree. Very few people order it, but its presence on the menu sure makes them feel better about the $26 entree they actually choose.

Another fascinating revelation is that the presence of an honor standard or system really does work. Ariely find that people were less likely to steal or cheat when reminded of the Ten Commandments, for example, even when they couldn't remember what all the commandments were. Just being reminded of some sort of honor benchmark (which could be anything, not just something religious) helps to prevent cheating. Also, people are less likely to steal when the results of their thievery are direct. In an informal experiment, when Ariely put Cokes in his refrigerator at work, they disappeared readily. When he put actual cash in the fridge, no one touched it. As he points out, stealing food and beverages is out of someone else's pocket, as if they had stolen cash, but most people stop short of stealing actual money. This is why white-collar criminals try to justify their behavior as victimless crime.

It's not a perfect book, and some of the research is too anecdotal to convince Ariely's fellow economists, but for the general reader it's fantastic--well-written, story-driven, and even funny. High marks.

[This review is also posted at The Review Revolution: janariess.typepad.com]

When it comes to making decisions, we think we are rational and in control (well, on our better days, at least). Turns out, this is not the case. In some interesting and sometimes shocking experiments, MIT prof Dan Ariely refutes the common assumption that we behave in fundamentally rational ways. Mixing groundbreaking research with everyday living, Ariely shows how our reason is overcome by illogical forces when we make decisions.

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.

Ariely's book goes on much in this vein. Experiment after experiment shows the delicate and unstable edifice on which our rationality rests. He relates an astonishing study in which male college students were asked to answer questions about sexual preferences, then paid money to answer those same questions while masturbating to pornography. The change in emotional state massively transformed the answers. To give two of the more unsettling answers, where 20 percent of the students originally said they would keep trying to have sex after their date said no, 45 percent of the aroused students said they'd keep pressing. And where 23 percent of the non-aroused students said they could imagine being attracted to a 12-year-old, 46 percent of the aroused students said the same. It will not shock too many in the audience to suggest that intense arousal may impede more rational thought. But the implication is significant: It suggests that "we" are not rational. Rather, we're rational at certain times and in certain places, and only then when we're in a certain emotional state.

Elsewhere, Ariely shows how we wildly overvalue things we think of as free, relating experiments in which individuals demonstrate a preference for paying nothing in order to receive a candy of minimal value rather than paying very little for a truffle they perceived of as high value. Make the low value candy a penny, however, and that preference disappears, even though a penny may as well be free. He also shows how expectations govern experiences, and relates studies in which individuals thought the soda they were consuming tasted much better when they were told, beforehand, that it was Coke or Pepsi. And on, and on. Our decisions are based on context, comparisons, emotional states, remembered advertisements, and a whole lot more that doesn't quite fit the description "rational."

But Ariely's point goes far beyond our irrationality -- it is the predictability of our processing flaws that interests him. It isn't that we sometimes make the wrong decision, but that we make it repeatedly, and in the same way, as a response to certain conditions and mental processes. Early on in the book, Ariely tells us about Gregg Rapp, a restaurant consultant who helps establishments figure out their menu pricing. "One thing Rapp has learned," writes Ariely, "is that high-priced entrees on the menu boost revenues for the restaurant -- even if no one buys them. Why? Because even though people generally won't buy the most expensive dish on the menu, they will order the second most expensive dish. Thus, by creating an expensive dish, a restaurateur can lure customers into ordering the second most expensive dish (which can be cleverly engineered to deliver a high profit margin)."

The implication here is that our irrationality is not only predictable, it's actually being predicted. Restaurants know that we anchor our frugality by deciding the priciest item on the menu is too expensive. Electronic stores know that we're likely to go for the marked-down television whose price places it in the middle of the pack. Magazines know we'll go for whichever subscription rate looks like the best deal as compared to the other subscription rates on the page. The problem, then, is not our predictable irrationality, but the world's asymmetric rationality. They know how we're going to screw up, and how to take advantage of it. The only defense is being similarly aware of our flaws and failings, and trying to take into account not only how they affect our judgment, but how they're being used against us. Ariely's book is an excellent place to start.

As a journalist, I've also had the pleasure of reading an advance copy of the book that will finish your exploration The Impulse Factor: Why Some of Us Play It Safe and Others Risk It All

At first glance, the title of Dan Ariely's book seems to be an oxymoron. (It certainly catches one's attention.) Can irrational thought and/or behavior be predicted? Perhaps if it is repetitive? (The judgment and behavior of at least some people can be repetitive and thus predictable.) So I began to read his book with curiosity but also, yes, with some skepticism. Here are a few of my reactions. First, he learned a number of "lessons" from what he calls "experiments" in his life, each of which struck him as being counterintuitive. For example, everything is relative...even when "it shouldn't be"...or in fact isn't. That is, our mind can "play tricks" on us and thus we tend to see what we expect to see, hear what we expect to hear, etc. Images and sounds are relative to their context or frame-of-reference within which we place it. Or consider the frequently expressed observation, "one man's trash is another man's treasure" or one or more of self-serving juxtapositions such as "He's a tightwad whereas I'm frugal...she's narrow-minded whereas I'm a specialist...They're stubborn whereas I stick to my convictions." Ariely's other lessons also, directly or indirectly, involve illusions and delusions of one kind or another. They explain why we can't make ourselves do what we want to do, why we overvalue what we have and especially what we purchase, and "why a 50-cent aspirin can do what a penny aspirin can't."

As I worked my way through the first few chapters, I was reminded of a joke I heard years ago. This fellow arrived just in time to tee off for another round of golf with three friends. They played every Saturday morning. "Hey, I've got great news! Just bought the best hearing aids that money can buy. They cost $8,000 each but they're worth every penny. It's a whole new life for me. Never been happier." "You spent $16,000 on two hearing aids? That seems expensive." "Nah, like I said, worth every penny." "What kind is it?".... The fellow glanced at his watch. "Exactly 7:30."To paraphrase Descartes: It is if I think it is.

Also, Ariely shares what he learned about the differences between conventional economics and behavioral economics. Contrary to "the far-reaching conclusions" that generations of economists have developed "about everything from taxation and health-care policies to the pricing of goods and services," asserts that human beings are far less rational than standard economic theory assumes. "Moreover, these irrational behaviors of ours are neither random nor senseless. They are systematic, and since we repeat them again and again, they are predictable." (Hence this book's title.) Ariely makes a convincing, at times humorous but nonetheless rational argument to support modification of standard economics, "to move it away from naive psychology (which often fails the tests of reason, introspection, and most important - empirical scrutiny)." He collaborated with a number of colleagues when conducting various experiments that enabled them to "slow human behavior to a frame-by-frame narration of events, isolate individual forces, and examine those forces carefully and in detail." The results of the experiments illustrate general principles of human behavior (e.g. the decision-making process) within and beyond the workplace.

Finally, I admire the extent to which Ariely succeeds in explaining the fundamentals of economics and social science for a reader such as I who knows essentially nothing about either. (Oh sure, I have some scraps of information and countless opinions but....) For example, in Chapter 9, Ariely describes an experiment that he conducted with two MIT professors to answer questions that include "How to explain violence? Why does it happen? Is it an outcome of history, or race, or politics - or is there something fundamentally irrational in us that encourages conflict, that causes us to look at the same event and, depending on our point of view, see it in totally different terms...We came up with a simple test - one in which we would not use religion, politics, or even sports as the indicator. We would use glasses of beer."(I do have extensive prior experience with beer!) The details of this experiment are best revealed within the narrative but I will indicate that the material in this chapter provides a number of revelations that help to explain "the hidden forces that shape our decisions."

Congratulations to Dan Ariely on a brilliant achievement!

I borrowed my Mom's copy of Nudge but couldn't get into it. It was a little more academic than my payrate, so to speak. I got this book instead and I am glad I did. Arely takes a breezy fun approach to Behavior Econmoics that made it easy for me to digest. He offers no advice, just information about some of the hidden aspects of human behavior. Gread Read, Bottoms Up!!

Disappointing in a big way. Very shallow. I am also disappointed in myself: though the hype train rolled for only a short time, I leapt on it. Shame on you NPR for implying there was heft to this trite brochure fluffed out into a book.

This was a terrific book but far from perfect. Ariely describes numerous studies. Readers will object to methodologies used and many of the author's conclusions and thoughts. But we have to keep in mind that the topic of the book is behavioral economics which makes disagreement and lack of perfect studies okay. Behavioral economics is not a hard science like physics or chemistry. Studies in hard sciences need to be reproducible to a greater degree than in behavioral economics. People who object that economics is not a science are correct in some sense but also many also do not appreciate that despite it not being a hard science it is still a very important discipline. The studies mentioned in this book are different than studies in hard sciences, where you can predict to a great degree of accuracy what will happen if you repeated the study, but we still should not discount the importance of these studies.

Ariely is entertaining and his enthusiasm is contagious. Whether you agree or disagree with his conclusions, he gives you lots to think about. As a bonus, there are real life applications to his studies that readers can immediately implement in their own lives.

Dozens of studies are mentioned in this entertaining book. Thoughtful readers may object to methodologies and the author's conclusions. For example, in one study demonstrating how free items are valued irrationally highly the author mentions that (actual numbers may not be accurate here, but you'll get the idea) 73% of participants chose to buy a 15 cent Lindt chocolate over a 1 cent Hershey's Kiss. When the price of Lindt was dropped to 14 cent and the Hershey's Kiss was free then 65% chose the Kiss over the Lindt. Isn't that irrational? Maybe but maybe not. Did a lot of people in the first scenario walk away without buying either and in the second scenario there was absolutely no draw back to selecting the free Kiss so they chose that over the Lindt. Perhaps if I were to look at the original study (which I didn't but there are references which the curious reader could pursue) I would find that this point was addressed. Ariely, himself, even discusses some points which would lead us to conclude that participants were indeed rational.

The author makes policy implications and makes the point that due to human irrationality traditional economics may not depict the real world as much as it could. This is a very valid point. For example, many Business School professors have been preaching the efficient market theory, which many others including the world's greatest investor, Warren Buffett, would not agree with. Ariely challenges the assumptions of traditional economics which ultimately will improve the discipline much like how Einstein improved physics when he challenged some of its assumptions.

This is an outstanding book and Ariely has done a great service by making these concepts readable for people not just in academics. I highly recommend this book and if you enjoyed this one then don't miss "Influence" by Robert Cialdini.

You never really know what's going on! Therefore, thanks to Dan for this book to help us uncover at least some of it. As I attempt in my own book, "The Expert's Edge," he offers us all a chance to understand hidden dynamics that, once we are aware of them, can drive us to success... and life satisfaction!

Excellent use of science and economics to explain some of the irrational decisions we make every day. Other reviews have captured the good parts adequately.

I agree with the review below me. His science is seemingly unassailable, but many of his "solutions" to problems seem to come from a left perspective. However, this was rare and the book generally refrains from normative analysis.

Overall excellent read, but not as captivating as Freakonomics was when it first came out.

The behavioral economics and studies behind this book are genuinely fascinating. It will challenge the way that you make decisions and reveal irrationality behind your most recent purchases. I had a great time reading it but I did move past some of the social recommendations that he makes in the book.

It's not that I think they are not good ideas, its just that I see them as irrelevant to the overall theme of the book. That is just the way that I read the book, but if you are interested in social commentary and possible solutions to irrationality in society, it can give you some interesting topics to think about.

This book is a combination of a very entertaining reading with great content. Ariel presents the results of several social experiments he has conducted during years of research. Most of them are unexpected, or should I say irrational? But most of those behaviors are really predictable regardles of how ilogical they seem.

You can apply the lessons learned in this book to your daily life, if you are going to business school this would be a great complement to any of your courses (marketing, ethics, finance, etc.)

Best of all, it is very, very entertaining.
I hope you enjoy this reading.

Today's mainstream economics is largely based on assumptions of rationality. Ariely shows that such assumptions are completely wrong. This has large implications for running an economic system that achieves a good life for people. People are constantly trying to improve their lives by buying more "stuff," but within very short time periods they find themselves dissatisfied again. The most common measure of economic prosperity used by mainstream economists is the GDP--which essentially counts up what people spend on stuff. Is it any wonder that GDP statistics do not correlate well with quality of life? No economist can afford to miss reading this book. For more on this, see The Loss of Happiness in Market Democracies and Beyond Growth: The Economics of Sustainable Development.

One of Ariely's fascinating findings is that most people would not steal money directly from someone else, but that if the fact that one is stealing is disguised even slightly, most people will do it. This principle is in my opinion why pollution, deforestation, and exhaustion of resources are so difficult to control. We wouldn't steal a fisherman's wallet, but dumping a half-gallon of chemicals in a stream seems different to us, even if the effect on the fisherman's income is the same.

I was especially intrigued by Ariely's analysis of the power of "free". Ariely doesn't mention this, but free parking is a fantastic example. One form of destructive government subsidy that many people don't know about is local regulation requiring the provision of certain numbers of parking spaces around businesses and residences. Most American localities have such regulations, which are known as parking requirements. The idea behind parking requirements is to make sure that free parking is always available. Unfortunately, the effect is to favor automobile travel over other forms of transportation, like walking, that don't require all that vehicle storage space. It's a form of enforced inefficiency. U.S. building codes also favor the automobile in other ways, such as by requiring very wide streets. Parking requirements are one of the main reasons why housing is so expensive in the U.S. The cost of parking requirements in the United States is in the hundreds of billions of dollars per year. For more on this, see Donald Shoup's book The High Cost of Free Parking.

In this book, Dan Ariely describes some of the ways people act and react to various real life economic situations. He provides great insight into context of why we do some of the things we do and supports his conclusions with examples of some of the research he has performed with other researchers.

Incredibly well written and a quick read.

I found this to be a pleasant and thought-provoking book. I recommend it to anyone who wants to understand the fundamental underpinnings of human behavior. All of Ariely's observations are research-based and are presented in an extremly accessible manner.

One chapter of the book struck me as particularly important for communicators. "The Cost of Social Norms" explores the benefits and the risks of creating a social versus a purely business relationship with customers.

Done well, the social approach develops longer-term deeper relationships between the customer and the business. The customer acts on a sense of connectedness in the business and sustains the relationship through continued interactions and transactions.

Done poorly, the social approach can create a break-up with all the animosity of a nasty divorce.

This one is staying on my bookshelf.

This book suprised me with its deft mix of accessible reading and intelligent summary of research. The author's conclusions are easy to understand, easy to believe considering his research, and easy to apply to all sorts of areas of life. Applying his observations can improve a person, business, or a country economically, socially, and emotionally. You simply have to read this book to understand it. And it is well worth it.

I enjoyed the book. It was an easy read. I felt the author didn't have enough focus. It felt like the author was trying to make a book out of ramdom studies he had done that while interesting still left me with the impression that he was reaching. So the point of the book he kind of forced is that people are not rational mostly because they are social beings and that is more important than being logical, and this is what is predictable, hence the title. Still I reccomend this book because I find hman behavior so interesting and the more we understand it the better off we are.

This is a great read written by a revolutionary economist with the gift of explaining complicated/complex economics to laypeople. A great job, and highly recommended. It will also make you reflect on how you make decisions and whether they are rational decisions.

Dan Ariely has written a very engaging look into experiments he has conducted over his tenure at MIT. He starts with his medical history of his third degree burns over his body. Ariely does this to make the reader aware of his inspiration to "discover what people really like" in the world. His first example is removing the cloth from his wounds in a fast or slow motion. The nurses are sure the fast rip with a quick flash of pain is the best way; however, this makes Ariely begin to wonder the truth behind this common assumption.

The book flows in and out of his history and there did not seem to be in chronological order. The reader could skip around the chapters to their own delight. Ariely has made the book approachable for anyone with an affinity for experiments and the "why" behind the decisions. This approach has been made popular by "Freakonomics", "What Sticks", "Economic Naturalist", and many other books along the same line. I enjoyed Ariely's book the most of the new economist book series.

Chapter Six, Nine, Eleven, and Twelve were my favorite chapters out of the thirteen in the book. Procrastination, Expectations, and Honesty are all prominently featured in these chapters. I did not feel I could better understand all the subjects he discussed in the other chapters any more than before for various reasons like I have read it, heard it, or not interested were the main reasons.

I believe people should give Ariely's book a look just to see where some of his antics and experiments are different from the aforementioned books. It is approachable and a joyful read that is over before it begins. Ariely has done something to set himself apart from the economist books before him and also borrows some of their insights for his book. If anything check the book out from the library to see his experiments in action and know why human beings are predictably irrational.

I have already recommended this book to my upper-level students in international relations courses. There is a longstanding debate in the field of IR (and throughout the social sciences) about whether it is more useful to take the "rational choice" approach of economics that attempts to predict behavior using formal mathematical models such as game theory and expected utility, or to use the evidence-based scientific approach of sociology and psychology that carefully examines actual behavior in an effort to figure out why people (and nations) behave the way they do. Each approach has its strengths and weaknesses. Neither is perfect. It would be wonderful if we could combine the best of both worlds: the simplicity and predictive power of economics with the rigorous empirical grounding of the scientific method. The emerging field of "behavioral economics" is an attempt to do just that. It takes the basic principles of economic modeling and adjusts them based on scientific discoveries about human behavior. Ariely's book is a great non-technical introduction to behavioral economics. Written for the lay-reader with no background in economics or psychology, this book explains, in simple, easy-to-understand terms, why people don't behave rationally, as economists like to assume they do. It's really a book about decision making. It asks the question of how people make decisions, and why they make the (often irrational) decisions they make. This is a fun book that touches on everything from marketing to finance to international relations to health care to sex. (Yes, believe it or not, people even make irrational decisions about sex; and sexual desire can interfere with our ability to think rationally.) If you've ever wondered why people often make irrational decisions, this is the book for you. And I'd especially recommend this book for all students of economics as a prophylactic against the field's rather irrational assumption that rational choice can explain everything.

an interesting way at how we think. if you liked Freakonomics, you'll like this even more.

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

In the spirit of Freakonomics, you'll find Predictably Irrational to be a fun, interesting look at behavioral economics. Why do we do some of the things we do? It has some interesting data and let's you think through some of your own actions. The only problem with the book is that the author makes an attempt at the end of some of the sections to provide his own answers. That is when it can be a little scary. For example, he doesn't quite understand the basic economics of Maxi-Min theory, and thinks it is irrational to want a free $10 gift certificate instead of paying $7 for a $20 gift certificate. Ummm, if you wind up not using the gift certificate, you are $7 better off doing what he would think is irrational.

More troubling to me was his statist view (for those unfamiliar with what Statism is -- it is the desire for massive government similar to what Democrats and Republicans desire -- it is the opposite of Libertarianism). The author argues that since people are irrational, government should take over some decisions for them (as if government wasn't just a collective, larger irrationality). To the author, it is better that we all suffer the same dismal fate instead of some people being better off. As an American (in the sense that I prefer liberty and freedom), I find his statist/socialist leanings a bit overbearing and unnecessary in this book.

this book has some interesting theories but they are overshadowed by the left leaning social/political commentary. I thought I bought a book on marketing experiments and not to be lectured on how government is the best answer to societies problems because people are too stupid. This man has obviously not lived in the real world only the academic world. Too bad because he has an inquisitive mind but it has been muddled by his environment.

In the spirit of Freakonomics, you'll find Predictably Irrational to be a fun, interesting look at behavioral economics. Why do we do some of the things we do? It has some interesting data and let's you think through some of your own actions. The only problem with the book is that the author makes an attempt at the end of some of the sections to provide his own answers. That is when it can be a little scary. For example, he doesn't quite understand the basic economics of Maxi-Min theory, and thinks it is irrational to want a free $10 gift certificate instead of paying $7 for a $20 gift certificate. Ummm, if you wind up not using the gift certificate, you are $7 better off doing what he would think is irrational.

More troubling to me was his statist view (for those unfamiliar with what Statism is -- it is the desire for massive government similar to what Democrats and Republicans desire -- it is the opposite of Libertarianism). The author argues that since people are irrational, government should take over some decisions for them (as if government wasn't just a collective, larger irrationality). To the author, it is better that we all suffer the same dismal fate instead of some people being better off. As an American (in the sense that I prefer liberty and freedom), I find his statist/socialist leanings a bit overbearing and unnecessary in this book.

Wealth Odyssey: The Essential Road Map For Your Financial Journey Where Is It You Are Really Trying To Go With Money?

A very good, and easily read, work about how our irrational behaviors are systematic and predictable. Effects such as decoys, anchoring, self-herding, the true cost of "free," social versus market norms, "reptilian brain," endowment effect, aversion to loss, making choices and sticking with them, consequences of not deciding, expectations, beliefs and conditioning, ethics, "free lunches" and more, are all discussed based on research results of experiments with groups of people.

Dan Ariely summarizes with 2 main lessons: we fail to comprehend forces that influence our behavior, but this does not necessarily mean we are helpless. Recognition of our foibles is a start.

A companion book to this one would be Your Money & Your Brain by Jason Zweig about what actually happens inside our brains when we think about money.

I really enjoyed this read. It offered some interesting insight into the way people make decisions, form opinions. Each discussion came with indepth desciptions of the experiments used to base assertions. The thought process behind the experiments were also discussed in detail.

One of the most eye-opening books I have read in a long time. This easy-to-read and digest book is a nice introduction to behavioural economics. It follows some threads that were in Freakonomics, which was good, too, but I like this one even better.

A great discussion of the topic, a little long on the conclusions. Entertaining writer.

Quick, enjoyable read that provided some refreshing insight into the world of behavioral economics with the premise that people are not perfect rational beings, rather they are irrational and often in very predictable ways. Quality stories, witty humor - overall an excellent summary of the fascinating research Dr. Ariely has done over the years.

This is an excellent book well written. It explains in clear and understandable language why we make some of the decisions we do even when it's logical to make other choices. Dr. Ariely writes with great humor and and understanding of his audience. I recommend this to one and all.

I am probably guilty of writing a public review after reading some of the others. I enjoyed the book initially but did not feel that same sense of satisfaction finishing. Then I read that one person enjoyed the early chapters about relativity and felt the book lost steam in the end. I actually bought a new Macbook this week and ended up buying the "middle" model of three offered. Now I know why. I am glad I read the book, but I wish the later chapters were as interesting as the beginning of the book.

Nutshell review - This is a great read. A thoroughly interesting, thought provoking and enjoyable look into the world of behavioural economics, or why we do what we do even when it makes no apparent sense!

Predictably Irrational

Dan Ariely has written a brilliant book that makes behavioural economics as palatable as some of his food and beverage stories.

There is not a person on this earth who has not been surprised sometimes about the dumb choices he/she has made, particularly during stores' sales. Ariely salves the wounded part of the brain responsible for these out-of-character decisions and explains that we all make bad decisions, sometimes.

As a school administrator, duty of care demands that someone stays behind with the child who has not been picked up by an errant parent. We discussed ways of addressing the problem, including fines. Ariely (p. 76) points out that relationships are often defined as either social exchanges or market exchanges, and in the case that he described how a day care centre introduced fines for tardy parents. This meant that the parents shifted from a sense of social exchange guilt to a market exchange monetary cost. When parents worked out the amount of the fine, they then made a decision about meeting the pickup time. He warned that "once a social norm is trumped by a market norm- it will rarely return". A great warning for us.

A second timely warning he issued educators relates to performance-based salaries. The danger is that the majority of teachers, who are driven by the moral notion of doing "good" for students, will be moved from social norms to market norms. Taylorist managerialist decisions are problematic in teaching.

Basically, the book is a good read. It is entertaining, insightful and educative. A 5/5 from me.

This is by far my favorite book hands down. There are some bad reviews on here saying that Ariely's experiments are inaccurate, but regardless, it was still very entertaining to read. I definitely recommend this book!

Very readable and after reading it is common sense but what a complicted world we live in. And, we made it so. Thank you Prof Ariely.

This book is recommended reading for anyone that is in sales (and aren't we all in some manner). This reviewer sells enterprise SaaS applications/outsourcing to large companies and this book is instantly applicable in my career.

Chapter 1 is worth the price of the book itself! Relativity is key...how many of us non-academics that have to present business cases or influence people for a living have seen the "analysis paralysis" invade our propspective decision making committees? How many times have you assumed your audience will take the information you are presenting and act on it rationally...this book has helped this reviewer to see that it is simply not the case. Futhermore, the author helps with framing decision scenarios...think of it as a blueprint to work from.

It's also refreshing to read a non-academic book with ideas on human behavior that are:
- written by someone with very high credibility
- based on evidence
- not found in the "sales help" section of my local bookstore (thank you Amazon recommendations) where the premise of decision making is flawed from the outset.

I don't get some of the criticism about left leaning ideas in this book...it's certainly not a theme of his to promote bigger government. Rather, to the author's credit, the one comment I do recall on health care pricing is a hypothesis that he can support with some evidence...even if you don't agree with him it's an interesting thought experiment.

There's so much more to take away from this book that can be applicable to one's life...that's not an exaggeration as Chapter 8 (Keeping Doors Open) was profound...I enjoyed this book from beginning to end.

One last comment...the chapters on dishonesty are fascinating!

Ariely writes of, among other things, arbitrary coherence. The mind has a thought based on expectation, excitement or bias. Every thought thereafter complies with this original thought for the purpose of creating coherence. The problem is that the validity of the ensuing thoughts are never tested.
The thoughts in this book, on the other hand, build a deliberate case based on explored hypotheses. The social scientist that Ariely is compels him to invent and test many social experiments which highlight our tendancies to fool ourselves.
Predictably Irrational is both extraordinarily researched and entertaining to read.

For some time now, economists have been talking about rational people and rational behavior. The more they've talked, the more puzzled the rest of us have become, because what they talk about often has no visible relationship to anything that exists in reality. "Rational behavior" is sometimes among the most far-fetched imaginable. This book offers an example on page 64:

"The rational consumer would estimate the amount of pleasure he expects to get from the Hershey's Kiss (let's say this is five pleasure units) and subtract the displeasure he would get from paying one cent (let's say this is one displeasure unit)."

Now I've never in my life tried to calculate numerical pleasure units for a Hershey's Kiss or anything else. Nor has anyone else I know, and I'm willing to bet you haven't either. That no one would want to suck the joy out of a piece of candy in that manner is common sense. To economists, however, measuring the pleasure units of a chocolate is all in a day's work.

Dan Ariely is one economist who is catching up to what the rest of the world already knows. "Predictably Irrational" is about his experiments in economics, all of which prove that ordinary people don't do what economists want them to do. I won't argue with the experiments. Most of them look sound, though there are flaws in a couple. The big problem here is not what Ariely got wrong, but what he got right. As a whole, the book demonstrates less how out of it people are and more how out of touch economists are.

For instance, there's a chapter on "The Cost of Social Norms". Ariely concludes that people behave differently under social norms than under market norms. In other words, we'll help out friends and family happily and freely. Once money is involved, however, we'll want decent pay. This, one would imagine, is obvious. Lesser minds than Ariely's would have sufficed to discover it.

What really threw me was the discussion at the end of the chapter. Ariely describes his experience at Burning Man, a festival where people exchange what they need without cash. Ariely remarks that it was a pleasant, low-stress experience. He says, "Could there be some aspects of our life that would be, in some ways, better without money? That's a radical idea, and not an easy way to imagine."

Now, here's the rub. I can imagine it easily. So could most other people. Of course the invasion of money into our private lives has made things less pleasant. Of course we'd be happier if we did more things on a friend-to-friend basis. Of course life would be better if we worried about our finances less. I'd reckon that every sensible person thinks so. The idea is not "radical". It's one of the most mainstream ideas around.

Ariely frequently designs experiments to prove things that are already known and makes `radical' new conclusions that are actually quite old. By itself, this might be funny. However, his unawareness of most human thinking also leads to wrong conclusions and bad solutions for the problems mentioned.

For example, he has a chapter called The Influence of Arousal. He concludes that arousal is influential; we make different decisions when turned on--by sex or other things--than when we're `cold'. Again, no surprises there. Ariely acknowledges that this has been known for a while. He references Stevenson's classis "Dr. Jekyll and Mr. Hyde", though he could as easily have quoted the Apostle Paul. ("My own behavior baffles me. For I find myself not doing what I really want to do but doing what I really loathe. Yet surely if I do things that I really don't want to do, it cannot be said that I am doing them at all,--it must be sin that has made its home in my nature." [Rom 7:16-7])

What Ariely doesn't seem to know is that the human race has techniques for grappling with these problems. His solutions are mechanical. Cars should measure and respond to the driver's emotional state. Credit cards should impose limits on how much we can spend. Yet these fixes might well create problems of their own. Why not instead return to the wisdom that civilization is based on? Many people have successfully conquered their reptilian selves and achieved a greater unity, not only in our society but all over the world. It takes effort, of course, so a technological quick fix sounds appealing, but we need something that's proven to work.

Ariely's problem is most acute in two chapters on honesty at end. He proves that many people are dishonest (surprise!) and also looks at honesty in different circumstances. For instance, he finds less cheating when people deal with cash than with other forms of money. This may be interesting, but again his solutions again are small and unlikely to work. He mentions ethics classis in college and graduate programs. Morality, however, starts in grade school, not grad school. Raising an honest person is a lifelong effort. Our society's falling ethical standards cannot be fixed with a band-aid.

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.

If you are just a little smarter than average Joe, go find something else. In fact, haven't you seen the guy's self-interview ? What !!! Duke University my d****

I read brain rules just before this, and was hoping that it was the same - approachable writing, great anecdotes, well structured. I found myself scanning and flipping through pages of even the most interesting parts, the experiments, because he was so long-winded and boring in presenting them.

At one point he spends a few paragraphs running into a friend during an experiment. That's it. No point, no relevancy - just "a funny thing happened." I'm happy he thought it was funny, but it added absolutely zero to his thesis.

PASS.

This is a very good book with rational explanations of the irrational paths we trod. Thanks Dan for letting a wrenching personal experience evolve into a wonderful expose of actual human thinking and endeavor.

A great introduction to behavioral economics. Light and fun reading that includes interesting thoughts on assumptions that shape our understanding of demand. Ariely is an intelligent, well connected individual who provides anecdotes in his conversational voice to deliver a distilled look at the blending area between psychology and economics. Perfect read for a 2008 summer!

Why do we make so many mistakes? This book provides many rational answers to that question. But some explanations of some of the experiments become too tedious. However, it is possible to skip over these parts and pick it up again when the tedium ends and miss out only on less than essential details about why we tend to so often cross our wires when making decisions.

Some books are engaging, easy to read and understand; others contain solid and rigorous empirical thinking. Often the most entertaining books contain dubious content and many with the best content can be deadly dense and boring. But a few books are both engaging and enlightening and Predictably Irrational clearly falls into this category. Ariely skillfully integrates the basics of experimental psychology with warm and personal accounts of the social context and significance of a series of systematic investigations of several intriguing questions. What he finds are things social psychologists might have guessed but it is nice to have the evidence to support our theorizing and speculation. I teach a Senior Research in Psychology at a small liberal arts college and will use many of the studies in the book in my class; I've already purchased a few extra copies and given them to students who will be taking the course next year. This is a great book for those interested in psychology and human decision making.

I enjoyed reading this book a lot. A lot of nice research examples and it gives you a extra understanding in the buying behaviour of people. But I rather missed the scientific data behind all the examples (at least some extra tables with percentage would be nice). And the author is very focused on his own research. A lot of time I wondered if some of the behaviour he describes is more a cultural phenomenon or biological one. When finished with the book I was left with a lot of questions. I read Influence: The Psychology of Persuasion (Collins Business Essentials) before this book and would recommend it if you like this book.

I thoroughly enjoyed this book and had quote it in conversation nearly daily as you see these behaviors play out. It is written well and goes quickly. The authors blog isn't bad either.

Predictably irrational or Unpredictably rational?

This book entertains as well as it explains. So read it. What the book doesn't mention is the paradigm clash between "irrationality" (studying circumstances that occasion choices which do not appear to be optimal) and "unpredictability" (studying unpredictable behaviors that are often optimal despite the appearence that they are irrational)camps of behavioral economics. For a comparison with an alternative paradigm, after you finish this book you might want to try reading Paul Glimcher's work on neuroeconomics (which uses game theory to explain why the rational course of action is often to behave unpredictably).

I picked this one up after hearing Dan Ariely interviewed on NPR. While it probably could have been about 1/3 as long without sacrificing anything (the writing seems really padded and needlessly verbose), each chapter has something to offer. I found the results of the author's experiments consistently interesting, and at least a few of them so struck me that I will modify my behavior and thinking as a result.

Those who are criticizing Ariely's attempts to apply his findings to the larger world should lighten up. It's just one man's opinion. The results of the experiments, however, are irrefutable. This is well worth reading, even if you do some skimming here and there.