499. Predictably Irrational: The Hidden Forces That Shape Our Decisions
Rating: ☆☆☆1/2
Recommended by:
Author: Dan Ariely
Genre: Non Fiction, Psychology, Self Improvement
400 pages, published February 19, 2008
Reading Format: Book
Summary
In Predictably Irrational, MIT behavioral economist Dan Ariely looks at situations where people act irrationally. Among other interesting questions, he asks: Why do our headaches persist after taking a one-cent aspirin but disappear when we take a 50-cent aspirin? Why does recalling the Ten Commandments reduce our tendency to lie, even when we couldn’t possibly be caught? Why do we splurge on a lavish meal but cut coupons to save twenty-five cents on a can of soup? In answering these other questions about irrational behavior, Ariely highlights a series of surprising experiments and dispels the assumption that we usually act ina mostly rational manner.
Quotes
“Ownership is not limited to material things. It can also apply to points of view. Once we take ownership of an idea — whether it’s about politics or sports — what do we do? We love it perhaps more than we should. We prize it more than it is worth. And most frequently, we have trouble letting go of it because we can’t stand the idea of its loss. What are we left with then? An ideology — rigid and unyielding.”
“Standard economics assumes that we are rational… But, as the results presented in this book (and others) show, we are far less rational in our decision making… Our irrational behaviors are neither random nor senseless- they are systematic and predictable. We all make the same types of mistakes over and over, because of he basic wiring of our brains.”
“individuals are honest only to the extent that suits them (including their desire to please others)”
“Giving up on our long-term goals for immediate gratification, my friends, is procrastination.”
“we usually think of ourselves as sitting the driver’s seat, with ultimate control over the decisions we made and the direction our life takes; but, alas, this perception has more to do with our desires-with how we want to view ourselves-than with reality”
“People are willing to work for free, and they are willing to work for a reasonable wage; but offer them just a small payment and they will walk away.”
“That’s a lesson we can all learn: the more we have, the more we want. And the only cure is to break the cycle of relativity.”
“MONEY, AS IT turns out, is very often the most expensive way to motivate people. Social norms are not only cheaper, but often more effective as well.”
“A few years ago, for instance, the AARP asked some lawyers if they would offer less expensive services to needy retirees, at something like $30 an hour. The lawyers said no. Then the program manager from AARP had a brilliant idea: he asked the lawyers if they would offer free services to needy retirees. Overwhelmingly, the lawyers said yes. What was going on here? How could zero dollars be more attractive than $30? When money was mentioned, the lawyers used market norms and found the offer lacking, relative to their market salary. When no money was mentioned they used social norms and were willing to volunteer their time. Why didn’t they just accept the $30, thinking of themselves as volunteers who received $30? Because once market norms enter our considerations, the social norms depart.”
“human beings are inherently social and trusting animals.”
“most people don’t know what they want unless they see it in context.”
“There are many examples to show that people will work more for a cause than for cash.”
“one that we are just beginning to understand- is that trust, once eroded, is very hard to restore.”
“Thoreau wrote, “Simplify! Simplify!” And, indeed, simplification is one mark of real genius.”
“Resisting temptation and instilling self-control are general human goals, and repeatedly failing to achieve them is a source of much of our misery.”
“feeling so far is that standardized testing and performance-based salaries are likely to push education from social norms to market norms. The United States already spends more money per student than any other Western society. Would it be wise to add more money? The same consideration applies to testing: we are already testing very frequently, and more testing is unlikely to improve the quality of education. I suspect that one answer lies in the realm of social norms. As we learned in our experiments, cash will take you only so far—social norms are the forces that can make a difference in the long run. Instead of focusing the attention of the teachers, parents, and kids on test scores, salaries, and competition, it might be better to instill in all of us a sense of purpose, mission, and pride in education. To do this we certainly can’t take the path of market norms. The Beatles proclaimed some time ago that you “Can’t Buy Me Love” and this also applies to the love of learning—you can’t buy it; and if you try, you might chase it away.”
“Without constant suspicion, we can get more out of our exchanges with others while spending less time making sure that others will fulfill their promise to us.”
“When people think about a placebo such as the royal touch, they usually dismiss it as “just psychology.” But, there is nothing “just” about the power of a placebo, and in reality it represents the amazing way our mind controls our body.”
“Tom had discovered a great law of human action, namely, that in order to make a man covet a thing, it is only necessary to make the thing difficult to attain.”
“people are sometimes willing to sacrifice the pleasure they get from a particular consumption experience in order to project a certain image to others.”
“humans rarely choose things in absolute terms. We don’t have an internal value meter that tells us how much things are worth. Rather, we focus on the relative advantage of one thing over another, and estimate value accordingly.”
“If you’re a company, my advice is to remember that you can’t have it both ways. You can’t treat your customers like family one moment and then treat them impersonally—or, even worse, as a nuisance or a competitor—a moment later when this becomes more convenient or profitable.”
My Take
I found Predictably Irrational to be a very interesting read that included a lot of fascinating experiments in its attempt to explain why humans often act irrationally. Additionally, there is some useful advice on how to forego irrational actions, improve your life and accomplish your goals.
