This is not a new book, having been published in 2008. Sometimes I like to go back and read a book that has been around for a while, partially because I just want to, and partially I want to see whether the author’s premise has withstood the test of time. That’s why I usually wait about five years to read books with titles like, The Coming Depression! Often, the coming depression takes a long time to arrive.
In the case of Predictably Irrational, Dan Ariely’s premise has held up. The book was towards the forefront of the movement called Behavioral Economics. What has not held up well is the economics that I was taught in college, the economics that assumes we are all rational consumers and profit maximizers. That’s called Conventional Economics and it underlies economic theory. The problem is that Behavioral Economics has proven that we do not act rationally when making buying decisions. This book is a series of illustrations of this point. And it isn’t that we are occasionally irrational, but we are predictably irrational, making the same foolish choices again and again.
Each chapter tells an interesting story and the research that was done, often including college students and beer, and fits that particular story into the overall narrative of the book. It is certainly the most fun-to-read economics text I have ever read. I read some pretty rigorous stuff, often not suitable for bedtime, but this book was a very light, easy, and entertaining read.
The stories are all surprising and illuminating, mostly because we assume we’re all rational, while clearly, we are not. I’m not going to describe any of the examples here, as I’ll leave that to you to enjoy if you choose to. And I hope you will; the book was a joy.
The other benefit of reading this book is to be aware of our foibles and make better decisions. As the author says, we are all pawns in a game whose forces we largely fail to comprehend. We think we’re making rational choices, but we’re actually being manipulated. We are taken advantage of because of the way we go about our lives.
We are not helpless. Once we understand these outside forces, we can be more vigilant and force ourselves to be more careful in our decision making. Or we can use technology to overcome certain shortcomings. But first, we need to be made aware of how we are being manipulated.
Since this is a used book, you can pick up a copy very cheaply on eBay. I paid $5 for mine. That’s the cost of a cup of coffee, right?
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