Quick Book Review: Predictably Irrational by Dan Ariely
March 24, 2013 11 Comments
The workings of the human brain are always interesting, especially for me, as I studied Psychology. In this book, Dan Ariely describes situations in which we humans behave irrationally usually without being able to help ourselves.
In 15 chapters he describes different kinds of irrational behavior illustrated by research that he has carried out over the years to investigate people’s actions when in a choice situation. I recognised lots of these situations but I also know I am aware of at least some of them and sometimes don’t act quite so irrational as Ariely wants me to believe.
But hey, when buying an item (say, a pen) that cost $25 in one shop, and $18 in a shop 15 minutes away, would you travel the 15 minutes for the cheaper deal? Probably. However, when buying a suit that costs $455 in one shop and $448 equally far away, we don’t bother. Still, the difference is $7 in both cases. It’s all about relativity. This is described in the first chapter.
The second chapter deals with anchors: if subjects had been offered to do a certain task for a small reward (e.g., $0.10), they were happy to do another task for a little bit more money (say, $0.25). But subjects that had been offered much more for the first task (say, $1) would not do the other task for $0.25. The idea is that once you have an idea of the value of something (the anchor), you use that knowledge to decide whether something new is worth it.
Very interesting was the chapter on social values. If you have a social relationship with someone, you don’t want him to pay you for helping him to move a sofa. But if you have a business relationship with someone, you’d not accept them expecting you to work for nothing or a reduced amount. Fantastic example: a group of laywers was asked whether they’d reduce their fees for poor pensioners. They were not willing to do this. Then they were asked if they would help them for free, and the lawyers were happy to do that. As a social favor, they would help the poor pensioners happily for free, but when money was mentioned, they were not willing to reduce their fees.
And so the book goes on with examples of irrational behavior and real-life as well as laboratory examples. It was easy to read and on the whole, very interesting. However, in the end I had had my fill and it became a bit more of the same.
But overall, a very good insight in our human behavior. It may not be rational, but between us, we’re pretty consistent and the marketing people know how to use that information to their advantage. Don’t worry, we’re all the same.🙂