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Book Review – Predictably Irrational by Dan Ariely

 

Last month, our focus was on “Thinking, Fast and Slow” by Daniel Kahneman, in which the author described our automatic vs. effortful ways of thinking.  This month, we look at being “Predictably Irrational” by Dan Ariely.  Ariely zeroes in on “The Hidden Forces That Shape Our Decisions” and he does so with hit-and-miss results.  On the plus side, the author and his fellow academics conduct interesting studies showing just how misguided our decision-making can be, and it’s nothing short of compelling reading.  And then in one chapter, subtitled “Why Hot is Much Hotter Than We Realize,” he goes off the rails in describing how college-age men will make borderline immoral choices when aroused.  Thanks, buddy, I imagine we all knew that already and didn’t need such a concept proven through a scientific experiment involving pornographic scenarios on a computer covered in Saran wrap.  Yuck.  That sort of over-the-top deviance and creepiness aside, the book is worth reading.

Let’s stick with the positive, shall we?  In one remarkable experiment, Ariely and his comrades studied the effect of the word “free” in our society.  They set up a table offering a chocolate truffle for $.15 or a Hershey’s Kiss for a penny.  The overwhelming majority of subjects went for the special truffle over the ordinary Kiss (nothing personal, but when you crank out 80 million of your product every day, which is what Hershey does with its top-selling candy, it can hardly be deemed special!).  The surprise came when they reduced each offering by one cent, meaning the truffle was available for $.14 and the Kiss for free.  The result?  The number of people opting for a Kiss increased roughly 250% to 69% overall, rendering the truffle bargain offer practically meaningless.  One imagines not having to dig for a penny in your pocket or bag might having something to do with the outcome, but it seems more likely that we can’t resist when something is offered for nothing, no strings – or Hershey’s wrapping – attached.

Ariely also explores the collision of market and social norms and the potential effect on relationships.  If you have a flat tire, you expect to pay a professional to fix the problem if you’re not willing to deal with it on your own, correct?  But let’s say you ask a co-worker to help you out.  Should you pay that person a wage for their efforts?  Before reading “Predictably Irrational,” you might debate the upside of at least making the offer; after reading it, you’ll likely agree with the author that “when we offer people a financial payment in a situation that is governed by social norms, the added payment could actually reduce their motivation to engage and help out.”  So now you can get your tire changed for nothing more than a “Thanks pal!” and a pat on the back, with your friend appreciating you all the more.  And what to do with the $20 you would have paid them?  Well, you could always pick up a good paperback!