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Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions |  | Author: Dan Ariely
Publisher: Harper
List Price: $27.99
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as of 11/21/2009 09:52 CST details
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Seller: smokymtnbooks
Rating:  39 reviews
Sales Rank: 1512
Media: Roughcut
Edition: Rev Exp
Pages: 400
Number Of Items: 1
Shipping Weight (lbs): 1.5
Dimensions (in): 9.1 x 6.4 x 1.2
ISBN: 0061854549
Dewey Decimal Number: 153.83
EAN: 9780061854545
ASIN: 0061854549
Publication Date: June 1, 2009
Availability: Usually ships in 1-2 business days
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Product Description
How do we think about money?
What caused bankers to lose sight of the economy?
What caused individuals to take on mortgages that were not within their means?
What irrational forces guided our decisions?
And how can we recover from an economic crisis? In this revised and expanded edition of the New York Times and Wall Street Journal bestseller Predictably Irrational, Duke University's behavioral economist Dan Ariely explores the hidden forces that shape our decisions, including some of the causes responsible for the current economic crisis. Bringing a much-needed dose of sophisticated psychological study to the realm of public policy, Ariely offers his own insights into the irrationalities of everyday life, the decisions that led us to the financial meltdown of 2008, and the general ways we get ourselves into trouble. Blending common experiences and clever experiments with groundbreaking analysis, Ariely demonstrates how expectations, emotions, social norms, and other invisible, seemingly illogical forces skew our reasoning abilities. As he explains, our reliance on standard economic theory to design personal, national, and global policies may, in fact, be dangerous. The mistakes that we make as individuals and institutions are not random, and they can aggregate in the market—with devastating results. In light of our current economic crisis, the consequences of these systematic and predictable mistakes have never been clearer. Packed with new studies and thought-provoking responses to readers' questions and comments, this revised and expanded edition of Predictably Irrational will change the way we interact with the world—from the small decisions we make in our own lives to the individual and collective choices that shape our economy.
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Showing reviews 1-5 of 39
 I love Dan Ariely...in a manly kind of way. November 15, 2009
Scott Weiss
I actually heard about Mr. Ariely from iTunes when I finally converter from non-iPod user to iPod user last year. I have always been fascinated with finances and investing. I also like to think about how people feel and think in everyday life. Those two things have come together and have become a masterpiece of work. Dan Ariely you are a great person. I have always wanted to read your book and finally got the chance to...and when I actually read a book that is not required reading, you KNOW that book is AMAZING.
The book has taught me some new things in life that I was try to spread among my friends and family.
Brilliant book by Dan Ariely! November 12, 2009
Shyam Sundar (Seattle, WA USA)
This is the best book that I've read this year. It is packed with interesting information that you can use in your day to day life to improve your decision making. The social experiments that back some of the theories have been intelligently devised and carefully thought out. The quality of writing is very entertaining and absorbing. Please add this to your reading list and benefit from this wonderful & well researched book.
 The author shows us he is not immune to the phenomenom November 10, 2009
John Thornton (Midwest)
I really wanted to enjoy this book. Actually I did enjoy parts of it but not nearly as much as I had hoped. Reading about the various experiments was quite entertaining but this book over-simplifies the authors own experiments. I believe even general readers want to know more about experimental methodologies than this author provides. The author frequently jumps to completely unsupportable conclusions based on his findings.
The author attributes the precipitous climb in CEO pay to federal regulators forcing companies, in 1993, to reveal remuneration for their top executives. This in the section on relativity, with the claim that when other CEO's saw their pay relative to others they all demanded higher and higher salaries and perks. This is silly beyond belief. Tax rates on salaries, bonuses, and capital gains offer a much better explanation than revealing remuneration. It's actually such a silly argument I'm surprised to see it attempted by anyone.
In the section on FREE the author makes the classic mistake in imagining that our preferences for intangibles like taste and beauty can actually be quantified by discrete units reflected in price. That isn't how such preferences manifest themselves and a professor of economic behaviour should know this.
The chapter on the influence of arousal is really interesting but concludes with a nonsensical idea for equipping cars with OnStar and parent configurable on-board computers to switch to soothing music when teens drive recklessly or turn on the A/C in winter or some such nonsense. Teens learn by exceeding boundaries to some degree. Having a computer "Mom" in the car may reduce accidents, until computer savvy teens learn to over-ride such precautions, but at the cost of teaching them self-control and social boundaries.
His section on consumer debt and lack of savings in the US totally ignores more important factors than self-control. His comparison of savings rates in the US -1% to the EU 20%, Japan 25%, and China 50% ignores the fact that wages in China have grown faster than the US, Japan, and the EU by a massive amount. When we look at the rate of wage increases for the bottom four quintiles, the bottom 80% income level, we see that this alone accounts for the lions share of the discrepancy between the US, Japan, the UE and China. Why blame lack of self-control when falling wages are the main problem? Easy credit in the US was implemented to make up for the fact that wages are falling relative to previous generations. Easy credit looked like a solution to falling wages that would allow consumption to continue at previous levels. This is classic blame the individual rather than the system that one would expect from right-wing shills. Perhaps this explains the credit card companies lack of enthusiasm for his silly self-control credit card idea?
All of the above are only some of the serious errors in the first half of the book. Detailing every such instance would obviously make for an unwieldy review.
The book is awash with silly "prescriptions" for solving problems that are really not problems and conclusion not at all supported by the experimental evidence. If you read the book to be entertained by the experiments you'll probably enjoy that part of the book but ignore the authors sweeping generalizations about how his experiments "explain" complex real world dilemmas. In too many instances there are much better explanations. This isn't to claim that there is nothing to any of his conclusions, there is some merit to some of them, but giving his findings primacy or even measurable significance in a great many instances is unfounded.
 Interestingly Irrational November 9, 2009
L. Woolley (Hartford, CT)
Generally a very nice easy to read exploration on how we each make decisions or should I say fall into regular patterns without considering why we do what we do. Enjoy questioning many of the simple decisions like what you eat at a restaurant with a group of friends.
Predictable Indeed November 3, 2009
Asher Gabbay (Israel)
In the past decade or so Behavioural Economics has become all the rage in both academic circles and among the general public. The financial crisis that started with the bursting of the sub-prime mortgage bubble in the US a couple of years ago has given behavioural economists a major boost.
The basic premise of behavioural economists is that humans are not necessarily rational when they make economic or financial decisions. One of the cornerstone assumptions of "traditional" economics is that we decide based on rational analysis of costs and benefits and seek to maximise our financial gains. It turns out this is not the case and many of our decisions are driven by "irrational" factors that defy the premises of traditional economics.
Professor Dan Ariely is another ex-Israeli scientist that has popularised Behavioral Economics with his book Predictably Irrational. Using relatively simple experiments he shows that many of our decisions are influenced by irrational factors, but more importantly, that this irrational behaviour is, in many cases, predictable. In other words, contrary to popular belief (at least in the last 300 or so years of the "scientific era"), humans are inherently irrational.
Here are a few examples:
- People will feel better taking a medicine that costs 10 times as much as another, identical, medicine.
- When faced with a free product, we will likely "buy" it even if they don't need it.
- Sexual arousal will lead people to change their behaviour and perform deeds they deem immoral.
- We will think food or drink are better if they are presented in a more glamorous setting.
Ariely's book is highly entertaining and provides some delightful nuggets of truth about ourselves. But I didn't find many of his "discoveries" surprising. It is true that we like to see ourselves as rational machines, but most of our life experiences clearly demonstrate this is not the case. Blind belief in a purely rational brain is, well, irrational. The work of Nobel prize winner Daniel Kahenman (with his partner Amos Tversky), around how people decide between alternatives involving risk, has been known for many years. Ariely's achievement is mainly in popularising the subject and presenting it in a way that most people can understand.
Showing reviews 1-5 of 39
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