Saturday, January 15, 2011

On 'Predictably Irrational' by Dan Ariely

This year has got off to a good start because after a prolonged limbo in which I stayed away from non academic books, I am finally back to reading! The book I just finished - Predictably Irrational, the hidden forces that shape our decisions - by Dan Ariely (a renowned behavioral economist, James B. Duke Professor of Psychology and Behavioral Economics at Duke University and a founding member of the Center for Advanced Hindsight) is a master piece if a master piece ought to be judged in terms of how many myths it can bust! 

The book cannot be slotted into any genre very easily. It is not purely academic; not a summary of findings and neither is it a paean to the discipline of behavioral economics. It is rather a mix of all this in small measures with a large emphasis on insights into irrational aspects of human behavior brought out by means of smart experiments conducted by Dan and his several colleagues. 

Product pricing, reference prices, self - control, decision making when sexually aroused, dishonest behavior, the advantages and disadvantages of having too many options - Dan talks about all of these things based on empirical findings. The book is priceless for the sheer number of surprising facets of human behavior it manages to reveal. A plethora of terms - Ikea effect, price decoy, arbitrary coherence, anchoring, herding, self - herding - and their explanations emerge in a very clear fashion. 

As Dan says, 

Life is complex, with multiple forces simultaneously exerting their influences on us, and this complexity makes it difficult to figure out exactly how each of these forces shapes our behavior.
Everyone who has an interest in marketing, consumer behavior and human psychology should definitely read this one. It would be time well spent. 

Also check out some of his videos on youtube.  


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Vamsi Ramakrishnan said...

I like this review because its honest and crisp . i personally like it because i Dont find odd insertions of flamboyant , bombastic words . What i was expecting was a little more detail in the jargon that comes in the end . please keep your blogs coming