“Predictably Irrational” is one of several pop social science books I’ve read and listened to (on audiobook in the car) over the last few years. To give you an idea of its place in the spectrum of these books, I’ll give you a quick rundown on each one:
“The Paradox of Choice” by Barry Schwartz
This book hit close to home for me, because it was about how the increasing abundance of choice is creating problems for indecisive people. It provided some tips on how to cope with indecision, such as “make your decisions irreversible.” This book has definitely influenced my daily life and I even emailed with Barry Schwartz for career advice, another topic that creates fits of indecision for me.
“The Wisdom of Crowds” by James Surowiecki
I enjoyed this book for the way it brought a scientific approach to business, using data to poke holes in baseless theories that businessmen have had for years. I especially liked this book for the way it questioned the wisdom of experts and expertise generally, a concept that has always made me skeptical. People think that CEOs or other experts have some special ability to make decisions. But even if those abilities are indeed better than anyone else’s (and let’s see proof of that), they still pale in comparison to an aggregate of the decisions of many people of various levels of education, knowledge and perceived talent.
“Freakonomics” by Steven Levitt and Stephen J. Dubner
I had a great time reading “Freakonomics” over several trips to Barnes and Noble. But I wondered about the response to this book and the controversy surrounding it, which implied that the idea of applying economics to everyday problems was so novel. No one had thought of that before, really?? Perhaps the two authors were simply the first people to market this idea in a way that created a phenomenon.
“The Tipping Point” and “Blink” by Malcolm Gladwell
I thought “Blink” had a less original perspective than the other books on this list and less compelling of a thesis (that making decisions more quickly was better than taking longer to make them – but only sometimes), but it was still enjoyable for its various individual stories. I preferred “The Tipping Point,” which felt like a more original, illuminating concept.
“The Progress Paradox,” by Gregg Easterbrook
This book had applications to our everyday lives that were both practical and convincing: for instance, it discussed how money and material things don’t make us happier, and then actually proved it with data and experiments. It also showed the ways in which we fail to realize how great life is, especially as a well-off person living in America in 2008. Though it’s technically a social science book, in reality it’s the best version of a self-help book I could think of, since it teaches you how to live better but its statements are backed by statistics and scientific evidence.
“Predictably Irrational” by Dan Ariely
Unlike all of the books above, except for Schwartz’s, “Predictably Irrational” was written by an academic, the person who actually did all of the experiments in the book: Dan Ariely, a professor at MIT. The book (which, like “Blink” and “The Progress Paradox,” I listened to on audiobook in the car) is a primer on behavioral economics, a field that explores why people make the decisions that they make, and the ways in which people sometimes act irrationally. The field questions basic principles of supply and demand, which assume that everyone acts in his or her best interests.
Ariely seems to have put his whole’s career’s worth of work into the book, structuring the book so that every piece of his career feels completely cohesive, all leading up to this simple but powerful thesis, that people are “predictably irrational.” Each chapter offers a simple lesson on human nature, and each one includes an experiment or two that Ariely performed that proves that lesson.
Many of these lessons would be invaluable to marketers and entrepreneurs. For instance, Ariely argues that people flock to things that are free, in ways that cause them to give up deals that don’t involve free items but are still far better deals. It explains that when making a purchase, people feel better when they’re comparing similar items, as opposed to viewing one item in isolation. So when William Sonoma introduced a bread maker for $275, people didn’t buy it, but when they added a larger bread maker for 50 percent more, people stated buying the original one. We overvalue the things we own. We’re too eager to keep our options open. We’re affected not only by placebos in pill form, but also placebos in price form: all things being equal, a more expensive pill helps us more than a cheaper one does.
The book was so convincing that I was surprised when Ariely indicated that behavioral economics is a new and very controversial area. That makes me a bit disappointed in the field of economics. Why didn’t anyone think about this before? And why aren’t more people more open-minded to it now? If economists can’t see both sides of an issue, who can?