March 18, 2008

News & Opinion: NYT review of Predictably Irrational

By: 800-CEO-READ @ 8:35 PM – Filed under: Current Events & Public Affairs

The New York Times Sunday Book Review had a great article on Predictably Irrational: A Behavioral Economist's Startling Insights for Irrationally Better Living by Dan Ariely. We've had several good reads on this book, one the reviewer calls "a far more revolutionary book than its unthreatening manner lets on." Writer David Berreby tells us that:
Another sign that times are changing is "Predictably Irrational," a book that both exemplifies and explains this shift in the cultural winds. Here, Dan Ariely, an economist at M.I.T., tells us that "life with fewer market norms and more social norms would be more satisfying, creative, fulfilling and fun." By the way, the conference where he had this insight wasn't sponsored by the Federal Reserve, where he is a researcher. It came to him at Burning Man, the annual anarchist conclave where clothes are optional and money is banned. Ariely calls it "the most accepting, social and caring place I had ever been." Obviously, this sly and lucid book is not about your grandfather's dismal science. Ariely's trade is behavioral economics, which is the study, by experiments, of what people actually do when they buy, sell, change jobs, marry and make other real-life decisions.
Berreby provides just a few of the insightful stories Ariely uses to illustrate irrationality, touching on concepts like the power of suggestion and the unfortunately common social habit of "wanting stuff we can't afford and don't need."
These sorts of rigorous but goofy-sounding experiments lend themselves to a genial, gee-whiz style, with which Ariely moves comfortably from the lab to broad social questions to his own life (why did he buy that Audi instead of a sensible minivan?). He is good-tempered company -- if he mentions you in this book, you are going to be called "brilliant," "fantastic" or "delightful" -- and crystal clear about all he describes. But "Predictably Irrational" is a far more revolutionary book than its unthreatening manner lets on. It's a concise summary of why today's social science increasingly treats the markets-know-best model as a fairy tale.
Read the review here: