Friday, July 13, 2012

Predictably Irrational- Dan Ariely

Predictably Irrational- Dan Ariely

the facts
satisfaction: Up
pages: 244
gender: M
nationality: Israeli
year: 2008

Ariely refutes the economic idea of a rational human being and instead explains how we end up being irrational, overpaying, procrastinating, and misguided.

I read this in one go. It was gripping. His writing style is conversational (while dropping in references to case studies) and so it's easy to read. Everything he pointed out, I ended up finding to be true through my own anecdotal memory. I loved it.

And while many of the points seemed often to be no-brainers to me, I had to remind myself of the economic human being. In archaeology, whenever we talk about economic theories and models we usually wrap up our summaries with “but of course human beings are irrational,” and you can be forgiven for feeling like wondering why we bother thinking about ancient economic practices at all. I know I have often been irritated by the strange gulf between economic theories and how they work in the world (oops, just outed myself as a free-market hater). Ariely points out that there are reasons why we are irrational-it's sort of like he makes irrationality into a logical system for understanding human societies which sounds a bit like I'm contradicting myself but I'm not. I guess you ought to read the book, I promise it's not as confusing as I am.

He points out the things that can influence a normal human being and offers ways to identify them and perhaps resist them a bit. Things like how we compare things, the influence of Free!, social vs economic norms, procrastination, endowment effects (once we've gotten something), loss aversion, and leverage biases are all used in marketing for instance. It is good to realize or be reminded of the little ways we can be influenced into being irrational when we feel we are being quite rational.

Instead it is utterly readable and I recommend it to anyone who wants to have some thinking time.

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