Trade Book Blog

Over the course of this semester, I had the opportunity to read an interesting book titled Predictably Irrational: The Hidden Forces that Shape Our Decisions (Ariely, 2008). Initially, I had hoped to read a different book, but when that was no longer an option I did some research. The reviews of this book were excellent (rave reviews from various sources and a New York Times Bestseller) and the topic did peak my interest so I took a gamble and chose this one. Even though it was not my first choice, it turned out to be a great read and I’m thoroughly pleased with my decision for multiple reasons. First off, Ariely’s book covered several social psychology terms and theories thus adding further cohesion to topics covered in class. Secondly, the examples used were so applicable to everyday life which allowed for a deeper understanding and appreciation of the ideas presented. Lastly, Dan Ariely was able to convey insightful academic literature in a way that was accessible to numerous audiences. He incorporated elements of humor and described the studies and terms in ways that educate the novice while still appealing to those with an understanding of the material. I would certainly recommend this book to anyone interested in social psychology or behavioral economics, or simply to anyone who wishes to understand why humans behave irrationally in a variety of different situations. Ariely’s book has something to offer all audiences and serves as a fantastic supplement to any social psychology (or behavioral economics) course.

One of the best things about this book is just how applicable it is to real day-to-day life. Right from the very beginning, the first chapter elaborates on the concept of relativity. Towards the end of the chapter, Ariely describes a scenario from a study conducted by Amos Tversky and Daniel Kahneman (1981). Participants were presented with two hypothetical errands to run: buy a new pen and buy a new suit. At the office supply store, there is a pen for $25, but there is also the same pen on sale for $18 at a different store 15 minutes away. When asked what they would do in this situation, most said they would drive the 15 minutes to save $7. Now participants move on to their second errand (hypothetically): buying a new suit. A similar choice question was posed this time in relation to the suit. The store you are at has a suit you like for $455, but just as you are about to buy it you are told that the same suit is on sale at another store 15 minutes away for $448. What did they choose? Most said they would not take the 15 minute trip to save $7 this time. This example illustrates a way in which relativity can produce irrational decisions. In both scenarios, they could save $7 by driving to the other location, yet they don’t because in the grand scheme of things, $7 dollars is miniscule in comparison to $455 (Tversky & Kahneman, 1981). I have found myself following this same pattern on some occasions as well. For example, whenever I take a big trip to the grocery store to stock up, I’m more likely to add a couple small items that I don’t necessarily need since I know it won’t affect the total cost that much relative to everything else. Yet, whenever I go for small purchases (grocery store or otherwise) I try to make sure to choose items on sale even if it only saves me $1 in the long run. Clearly these two mindsets don’t match up, but many people operate this way regardless.

Another prime example that is portrayed in this book (which sometimes feels like the story of my life) is that of procrastination and self-control. Ariely refers to a study he conducted in his own classes where he varied the due date options across the course. In one case, he set strict deadlines for his students. In another case, he had his students select their own deadlines for the assignments but with penalties in the event that they fail to meet their deadlines. The last condition did not set any deadlines other than to have everything submitted by the last day of class. What they found was that the students who were given firm deadlines made the best grades, the students without any deadlines did the worst, and those who set their own deadlines scored in the middle. This suggests that imposing restrictions is the better route to combat procrastination (Ariely & Wertenbroch, 2002). I have seen this prove true time and time again. I would consider myself to be a chronic procrastinator. I don’t like being in those situations so there have been a couple times where I thought to myself “I’m going to set deadlines for myself and write them on a calendar so I won’t end up procrastinating this time”. It’s a great idea in theory, yet I always fail to stick to my own deadlines. It seems that the only ones I can consistently follow through with are those given to me by external sources. What Ariely suggests, however, is that one of the main problems for the students who chose their own deadlines was that they chose deadlines that were not spaced well (Ariely, 2008). Spacing deadlines out over the course of time seems to produce better results than having deadlines close together. Apparently I just need to work on properly spacing my tasks (or just resort to having someone else impose deadlines for me) if I really want to reduce my procrastination tendencies.

One other study Ariely describes refers to honesty and how much people will lie when presented the opportunity. In one study he presented participants with a series of difficult math problems to finish in five minutes. One group was instructed to return their forms to the experimenter (control) and another group was told to write the number of problems they answered correctly on a separate sheet of paper (which was turned in) and discard the original paper. In earlier trials, the second group did in fact lie and inflate the number of correct answers they had. In a second test, prior to completing the math task, participants were either instructed to write down 10 books that they have read or the Ten Commandments. What they found was that writing out the Ten Commandments beforehand primed those participants to think about honesty and morality, which led them to not cheat at all (Ariely, 2008). I find this study particularly relevant given that we adhere to an honor code at Southwestern. Little did we know that every time we write the honor code on an assignment or exam, we are being primed to act honestly and morally (not that SU students are dishonest in the first place). I know that I personally have a stronger appreciation for our honor code and even find it strange when I hear about other institutions that don’t abide by one.

In addition to the real life applications, I found several other qualities of the book to be equally great. I personally appreciated all of the study descriptions included throughout the book. There were at least two mentioned in each chapter, sometimes more. Ariely ultimately strengthened his message by providing empirical evidence to support his explanations. (And of course he provided a bibliography and acknowledged his collaborators in the latter portion of the book so there is evidence that these studies do exist.) Not to mention, his descriptions of the studies are likely very accurate because in numerous cases he contributed directly to the research. He is a credible source who offered unbiased, systematic interpretations for the topics discussed. Furthermore, Ariely conveyed all of this information in such a clever and exciting way. Sometimes scholarly work can come across as esoteric and be intimidating. Yet, Ariely effectively communicated his ideas in “plain language” that was accessible to a variety of audiences while still maintaining the integrity and substance of the research material. I also liked his explanations of traditional economics and how behavioral economics actually does a better job in interpreting consumer behavior. Before reading this book, my understanding of economics was limited but Ariely’s book offered simple descriptions and comparisons which I found useful and informative. His writing style and the inclusion of personal stories also made the book more enjoyable and relatable overall. In fact, I cannot think of anything I did not like about the book. The content was interesting and presented well, plus it was useful in that I will now be more aware of my irrational tendencies and can work to modify my behavior in the future.

 Even though a multitude of irrational behaviors are addressed in this book, there is definitely a prominent take-home message that prevails throughout all the chapters. What the studies in this book reveal is that human beings aren’t as “superior” or rational as we credit ourselves to be; we all fall victim to irrationality whether we recognize it or not. While this may seem dismal to some, the more important note is that by gaining a better understanding of human behavior in realistic terms, we can get better at recognizing when we make these errors and try to modify our behavior to be more rational. In other words, by shedding light on the influences that shape our decisions we can increase our self awareness and thus work to actively change our responses and decisions.

Brief Summary

Predictably Irrational takes the reader on a journey to discover the forces and influences that guide irrational behavior over the course of thirteen chapters. Each chapter addresses a different topic such as relativity, cost of social norms, effects of arousal, procrastination and self-control, the price of ownership, honesty and so much more. The studies cited, some of which were conducted by Ariely himself, offer empirical evidence which aid in explaining why we act the way we do. Ariely also includes personal anecdotes to illustrate these phenomena further. In addition to explaining the errors of our ways, Ariely goes on to offer strategies and suggestions for avoiding these mistakes when they typically arise. The author also strives to make clear distinctions between traditional economic theory and behavioral economics as well as the realistic implications surrounding both approaches. This book challenges readers to think critically about making decisions, especially when money is involved.

About the Author

          Dan Ariely is currently the James B. Duke Professor of Psychology and Behavioral Economics at Duke University. He received his B.A. in psychology from Tel Aviv University and went on to earn his M.A. and a PhD in cognitive psychology from the University of North Carolina at Chapel Hill. He also earned a second doctoral degree in business administration from Duke University. (His book, Predictably Irrational, was written while he was a fellow at the Institute for Advanced Study at Princeton.) From 1998 to 2008, Dan Ariely was a Professor of Behavioral Economics at MIT’s Sloan School of Management. Ariely has published two other books in addition to the one mentioned here: The Upside of Irrationality and The Honest Truth about Dishonesty (Ariely, 2012). Furthermore, his work has been published in numerous academic journals and has been featured in several popular media outlets including the New York Times, the Wall Street Journal, and the Washington Post (Ariely, 2008).

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Ariely, D. (2008). Predictably irrational: The hidden forces that shape our decisions. New York, NY US: HarperCollins Publishers.

Ariely, D. (2012, December). Curriculum Vitae. Retrieved from http://people.duke.edu/~dandan/webfiles/arielycv.pdf

Ariely, D., & Wertenbroch, K. (2002). Procrastination, deadlines, and performance: Self-control by precommitment. Psychological Science, 13(3), 219-224. doi:10.1111/1467-9280.00441

Tversky, A., & Kahneman, D. (2004). The Framing of Decisions and the Psychology of Choice. In D. A. Balota, E. J. Marsh (Eds.), Cognitive psychology: Key readings (pp. 621-630). New York, NY US: Psychology Press.