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| Predictably Irrational: The Hidden Forces That Shape Our Decisions | 
 enlarge | Author: Dan Ariely
Publisher: HarperCollins
Category: Book
List Price: $25.95
Buy New: $15.44
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Avg. Customer Rating:  146 reviews
Sales Rank: 69
Format: Roughcut
Media: Hardcover
Number Of Items: 1
Pages: 304
Shipping Weight (lbs): 1.3
Dimensions (in): 9.1 x 6.5 x 1.2
ISBN: 006135323X
Dewey Decimal Number: 153.83
EAN: 9780061353239
ASIN: 006135323X
Publication Date: February 19, 2008
Availability: Usually ships in 1-2 business days
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| Customer Reviews:
 Only an economist... March 21, 2008
24 out of 60 found this review helpful
" Ariely has discovered in 20 years of researching behavioral economics, people tend to behave irrationally in a predictable fashion"
Wow. Just wow. Only an economist would find this to be anything of a revelation. Herb Simon won the Nobel in Economics three decades ago for pointing out that people do not behave according to the rules of mathematically normative rationality that are assumed in most economic models; an idea which psychologists have understood well for decades before that. And economists are STILL just waking up to this idea, and writing books about it, books psychologists could have written (and did, it turns out) decades earlier. Yikes.
 Interesting Insights; Flawed Conclusions March 15, 2008
23 out of 33 found this review helpful
"Predictably Irrational" is an interesting book, offering several useful insights into human behavior. Unfortunately, the conclusions the author draws from these insights and the policy recommendations he advances are seriously flawed. They are devoid of thoughtful analysis and substantiation and seem motivated solely by the author's political orientation. Two examples illustrate this point, though many more could be provided.
In one chapter, the author notes that, in an attempt to combat excessive CEO compensation in corporate America, companies were required to publicly disclose these salaries and those paid to other senior executives. The result? CEO salaries increased because of the relative comparisons that were inevitably made by executives: "I'm as smart or smarter than Jones, so I should be paid as much or more than he gets." I do not take issue with the notion that people measure their perceived worth against that of other people; from this observation, however, the author offers the following lament: "All this extravagance in CEOs' pay has had a damaging effect on society." (Page 18). Really? What damaging effects is Mr. Ariely referring to? We will never know because he offers no evidence to support this claim. Nada. Are the salary demands of professional athletes affected by their knowledge of the salaries paid to their peers? If so, have the compensation structures in the NBA, NFL and MLB had a "damaging effect on society"? Since when is the dissemination of information about the cost of any item--whether it be widgets or the price you must pay to get a top-flight CEO or a good point guard--a bad thing?
Even worse, in another chapter Mr. Ariely concludes that because his experiments show that our buying decisions are often irrationally influenced by the initial price we are quoted and by our past buying experiences, he chooses to label the entire science of supply and demand a "fallacy" and to question our commitment to the free market and free trade. Here again, he offers no evidence regarding the relative weight these forces should be given when weighing their impact on the economy--just his own idle speculation. And what does he propose? If you accept his unsubstantiated assertions, then, according to Mr. Ariely, "you may find yourself among those who believe that the government (we hope a reasonable and thoughtful government) must play a larger role in regulating some market activities, even if it limits free enterprise." (Page 48). Mr. Ariely, as soon as you locate on this planet a consistently "reasonable and thoughtful government," I will be delighted to let it run our economy. Until then, I'll stick with what we have.
In a word, Mr. Ariely believes that because we sometimes collectively and individually behave in an irrational way, we need the government to save us from ourselves. If you believe that, you will love this book.
Trivial Pursuit! February 22, 2008
22 out of 44 found this review helpful
The goal of "Predictably Irrational" is to help readers fundamentally rethink what makes them (and others tick), help them learn how to avoid some of our repetitive errors. Works for me -
The problem, however, is that it deals with minor issues that Toyota, G.E., Wal-Mart, etc. pricing personnel probably knew upon birth or have no use for. Examples include: "The more we have, the more we want - the only cure is to break the cycle (eg. trade in your Porsche Boxer for a Toyota Prius." A $7 discount on a $25 pen has more influence than the same discount on a $450 suit. "Free" sometimes makes us act overenthusiastic vs. a near-free offering.
I'd suggest something from marketing or economics on pricing instead.
 Predictably Socialist March 12, 2008
19 out of 25 found this review helpful
This book is a thorough survey of various experiments that the author conducted in hopes of finding out more about why people do the seemingly irrational things they do. It is a theme on the very intriguing new science of Behavioral Economics (a mix between economics and social science) and offers the reader a fascinating collection of stories and scenarios that compel thought and encourage further study. It is a lot like the work of Malcolm Gladwell, Daniel Gilbert, and Tim Hartford. And like the work of those noted authors, `Predictably Irrational' is also a victim of the abstractions the author describes and ends up feeling awfully irrational, itself.
To begin, the title is misleading. The author claims that humans are irrational, using all kinds of examples of wacky human decision-making to prove this, but he never really defines what `rational' is or thence what `irrational' is. At the start, we are to assume that `rational' means `based on some sort of easily calculable monetary gain', and when we make decisions that are based on some other criteria, we are supposedly being irrational. For example, in a study explained in chapter 6, the author assumes that saving money is good (saying that the Japanese are "much better" in that department because they save so much more than Americans do). Given that assumption, all Americans would rightly want to save money and the fact that we don't (our savings rate is actually negative) means that we're irrational.
The author then explains why we make the decisions we do make, giving us very useful information on the concepts of the Decoy Effect, Herding, Anchors, Hidden Costs, and Social Influences. By doing this, however, he ends up showing us reasons for doing the things we do. They might not add up to the goal that he assumes and they might not be good reasons, but they are still based on good rationale.
Many of the ulterior motives, however rational they are, are rather disagreeable and the author is right to disparage them. But the fact that we continually succumb to these motives does not mean that we're irrational, it only means that we're irresponsible or weak-willed. This is a crucial point of distinction because it affects the practical effect of this thesis. While the solution should be more responsibility or stronger will, the author gets diverted and leads the readers in a dangerous direction.
In fact, the author claims throughout the book that responsibility is impossible, that we are helpless in defeating our baser motives and that we should just figure out ways to trick ourselves into doing what is right. When people are irrational, they must be manipulated somehow. As it turns out, Mr. Ariely is a very tricky guy.
In chapter 5, for example, he says that we simply cannot count on young people to do the right thing with respect to sex when in the heat of the moment. So we should make condoms readily available and focus sex ed, not on the physiological aspects of reproduction, but the emotions that accompany arousal so as to give students the impulse to walk away before the temptation strikes. While these suggestions might have merit, they assume that the young people involved in the fooling around ought to have no accountability in the matter whatever.
Many of the solutions suggested in this book tend toward socialism, which is actually the rational answer to a society thought to be made totally of irrational people. Ariely attempts to debunk "the fallacy of supply and demand" and encourages government involvement in many instances. The idea is to control the mindless masses by regulations, rules, and safeguards, because it is clear that they cannot take care of themselves.
The conclusion is especially striking coming from someone associated with the field of economics, where libertarian ideals flourish quite naturally. On the other hand, the social sciences beget as much socialist thought as they dare. It is no wonder, then that the combination of the two fields creates such an inconsistent, fascinating, and often self-defeating book. Caveat emptor.
`Think how hard physics would be if particles could think.' July 25, 2008
17 out of 18 found this review helpful
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
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