Book Review: Predictably Irrational

Predictably Irrational: The Hidden Forces that Shape our Decisions (Wiki - Amazon) by Dan Ariely explores behavioral economics, an overlooked, underestimated and not well understood area of economics. Using social experiments, it demonstrates how human beings act predictably irrationally in numerous situations in real life, challenging not only the reader’s view of his own rational life, but also the very foundations that our economic system is based on.

At first I was going to write a complete chapter-by-chapter summary of this book. But then I realized two things: firstly, that it’s impossible to do, and secondly, that someone has already done it. My perceived impossibility comes from the range and scope of the book, which makes it impossible to fully explain in a few thousand words. The already-done summary can be found on Wikipedia right here. It is not a perfect summary, because apart from omitting three chapters (among which The Power of Price is one of the best chapters in my opinion), it leaves out the experiments and their results, which is a quite fascinating part of the book, and it also might be quite hard to fully understand some concepts without reading the book, but it is nevertheless the least someone can do to try to understand the flaws in human behavior.

As to the book itself, I believe it is well written and well explained, sometimes maybe a bit too much for my taste. This I think is the largest drawback - too much explanation and sometimes even repetition - I would have enjoyed the book better had it been 50 pages shorter. Some of my critique goes to a few chapters that seemed uninteresting to me in comparison with the others, such as Keeping Doors Open and The Context of Our Character. I could also adopt a meticulous stance and complain that his research may not be all that reliable for three reasons: firstly and secondly, his subjects are almost always young, American university students, and their number is usually in the range of dozens to hundreds, which obviously limits the truth of general statements about all of human population. And thirdly, the book is written in a manner as if it was trying to persuade you of people's irrationality; it is far from being unbiased as it doesn't offer any counter-arguments to its theory. This, coupled with the fact that Ariely rarely publicizes the actual numerical data of the experiments, again limits the credibility. Other than that, I don't think the book has any major negatives.

As Ariely states in the introduction, "understanding how we are predictably irrational provides a starting point for improving our decision making and changing the way we live for the better,” a statement I absolutely agree with. Being aware of the flaws in our behavior makes it much easier to resist the forces that try to subconsciously exploit them, such as advertisement. This area is beneficial not only for the indivual lay reader, but also for society at large, as understanding human behavior can help us to devise better-functioning economic, political, and sociological systems. On the whole, I would definitely recommend reading this book.