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July 16, 2008

Jack Covert Selects: Jack Covert Selects - Predictably Irrational

By: 800-CEO-READ @ 6:02 PM – Filed under: Management & Workplace Culture

Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely, Harper, 280 pages, $25.95, Hardcover, February 2008, ISBN 9780061353239 We've all been there--the skin-to-strip adhesive is beginning to give, and it's clearly time to give the Band-Aid the ol' yank. That truism from mom--"fast and easy"--rings true, but does it really? According to Dan Ariely, maybe not... As amusing as such human trivialities prove to be for light lunchtime reading, the increasingly grave results stemming from our seemingly simple everyday decisions (hybrid vs. hydrogen, fluorescent vs. incandescent, Starbucks vs. Dunkin' Donuts) beg a closer examination of Ariely's theory that we're not only all irrational, but Predictably Irrational. Pointing out inherent human foibles is no gesture of contrariness or devil's advocacy on the part of the author. Rather, as Ariely states, "these irrational behaviors of ours are neither random nor senseless. They are systematic, and since we repeat them again and again, predictable. So wouldn't it make sense to modify standard economics, to move it away from naive psychology?" Hoping to expound on the growing field of behavioral economics, Ariely guides the reader through the backwaters of our own minds. Chapters chart the dangers of making decisions based on comparison (citing Crocodile Dundee nonetheless), the fallacy of supply and demand (Starbucks tricked us!), and the ridiculously high price of ownership (would you pay $2400 for a basketball ticket?). All the while Ariely keeps his tongue planted firmly in cheek. And, as for the Band Aide, it turns out that mom may have just been protecting herself from discomfort when she offered the quick-rip solution: Patients actually feel less pain if treatments are carried out with lower intensity and longer duration. Ariely is currently the Alfred P. Sloan Professor of Behavioral Economics at MIT, holding a joint appointment between the school's Media Laboratory and the Sloan School of Management. What does such a lofty title mean, you might ask. Basically, that he understands human behavior as well as anyone on the planet, including the cognitive workings behind every one of our weird inclinations at work, in the store, in restaurants, and even at the bar. But throughout this book, the Professor's Friday afternoon tone never wavers--he's conversational, informal, and increasingly engaging despite the usually tedious nature of such a barrage of examples. Rarely is a book of empirical evidence at once so eye opening and fun.