08 May 2008

Predictably Irrational

Just finished this book by Dan Ariely, which got a lot of notice when it came out, including pieces on NPR and in the New Yorker. Ariely is a social economist (or something like that) who studies the way we make decisions. And his "startling" conclusion is that, while we think we are rational, we make decisions for all sorts of irrational reasons.


While some of the observations are no-brainers, the detailed mechanics of how we make decisions (when provided) can be very interesting. For example, he talks about how we have a hard time deciding between two different things (e.g., a colonial house and a modern one), but if we have three things to choose from, and one is a defective version of another (e.g., a colonial house, a colonial house with a leaking roof, and a modern one), we tend to have an easier time, choosing the thing that is not defective, but has a defective version (e.g., the intact colonial house). Also, in general, our sense of what things are worth can be dependent on an unrelated number we have in our head (a price anchor).

The book as a whole is conversational and jokey (irritatingly so, Victor thought) but offers some interesting ideas to chew on.

A quick read.

1 comment:

Steve sculpts critters said...

I heard an interesting TED talk on YouTube which suggested we are happier with less choice, since then we aren't regretting not getting the 3 million slightly different versions of what we got.
Irrational decisions?
Well, if we were all truly rational there wouldn't be so many religions. Surely not all of them can make sense?
The harder you try to make sense of them, the more get tossed out.