Predictably Irrational:
The Hidden Forces That Shape Our Decisions
If you’ve read Predictably Irrational: The Hidden Forces That Shape Our Decisions, you’ve probably recommended it to a friend. I you haven’t read it, then I think you’ll like it provided that:
- You like to learn strange facts about how the human world really works, and
- You sometimes enjoy well-written books on science by scientists who know what they’re writing about.
The author of Predictably Irrational, Dan Ariely, is a professor of behavioral economics at Duke University, and he’s written a book about pain, placebos, payment, procrastination, and prices (that’s just the Ps), as well as the necessarily priceless value (and fragility) of key social norms, the special moral psychology of money (but not tokens redeemable for money at the back of the room), and the strange allure of anything FREE! (but not of things that are merely very, very inexpensive). When Ariely speaks of the cost of holding options, he isn’t talking about financial instruments, but about the cost to us all of systematically over-valuing the range of our personal choices — and in his world, this means overvaluing in terms of our own considered values.
Like Nudge, the powerful reality that drives Predictably Irrational is the gap between the behavior of hypothetical highly-informed, fast-calculating rational agents (species homo economicus) and the predictably different behavior of real human beings. And as in Nudge, the focus of the book is on the growing science of human non-rationality, what it can teach us, and how we can use this knowledge to make life better by improving both public policies and the quality of our personal insight.
{ 6 comments }
Howard Lovy 02.05.09 at 10:44 am UTC
Excellent post, Eric, and I am happy to see you blogging again. I’ll pick up a copy of the book. I have argued endlessly on my blog that actual humans — complete with our superstitions and irrationality — need to be taken into account in all technological progress or scientific advancement. Failure to do that will end badly for science and “consumer” of science. I have no patience for scientists — or, for that matter lawyers or politicians — who fail to take humanity as it exists into account when making decisions for “humanity’s good.” Glad to see that I’m not a voice in the wilderness! — Howard Lovy
Eric Drexler 02.05.09 at 8:31 pm UTC
Thank you!
Brian VanLeeuwen 02.06.09 at 3:32 pm UTC
Sounds like a fascinating book. I generally prefer physical sciences to these lesser sciences like human behavioral science (just kidding!), but I love economic theory. Since our capitalist system is based on assumption that we are all perfectly informed and perfectly rational beings that invariably maximize our own utility function, the deviations of real human behavior from this assumption are always interesting and relevant.
John Thompson 02.06.09 at 9:58 pm UTC
People change with the times. So study of human behavior is fascinating.
The “hidden forces” on Madison Avenue have exploited all sorts of psychology with PET scans and Squid arrays of human emotional responses to promote sales.
Hopefully the powers that be will save us with safety nets against irrational herd behaviors like the real estate bubble instead of causing these calamities. A calamity actually is GDP according to the corporate sponsored governments — so everything is relative, (like the un taxed quadrillion? $ world derivatives casino that imperils the world financial system but helps with slowing runaway destructive growth).
Democracy itself is regulated to avoid tyranny of the masses. Leaders use these tools of analysis i suppose to maintain the firewall around power. This is something to study if it would be funded.
Random Guy 02.06.09 at 10:12 pm UTC
Good pick!
I read the table of contents on Amazon and was teased into a lather.
There is much more to Ariely than his insightful comments on public radio.
Joseph Hertzlinger 02.08.09 at 7:42 am UTC
If these theories are made the basis of a set of regulations, should we first check to see how regulators can be predictably irrational?
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