Predictably Irrational

Have you ever wanted to better understand your colleagues, customers, family and friends? Or even - dare you admit it - yourself?

Subtitled "The Hidden Forces that Shape our Decisions", Predictably Irrational is a work by behavioural economics professor Dan Ariely. Despite his impressive and somewhat intimidating resume, which includes MIT and Princeton, Dan's writing style is chatty and easy to follow.

Andrew Lloyd Gordon

I was introduced to his theories during a training course at the IDM (Institute of Direct and Digital Marketing) in London by Andrew Lloyd Gordon.

And what a revelation! Although Dan Ariely's field is behavioural economics, there's a strong psychological resonance to his work as well.

Addressing questions like "why does recalling the ten commandments reduce our tendency to lie - even when we KNOW we can't get caught?" and "why do headaches persist after taking a cheap painkiller but disappear when we take an expensive one?", the book explores the idea that, in the modern age, we believe we are enlightened, rational beings in control of our own lives (Nietzsche and Richard Dawkins anyone?).

But are we? From choosing to pay £3+ for a cup of coffee to the obesity epidemic and choosing a romantic partner, we are consistently willing to overpay, underestimate and procrastinate. We fail to reconcile the impact of our emotional responses with our choices. Dan Ariely systematically analyses our decision-making process and reveals the pervasive and predictable irrationality that informs it.

Dan Ariely

Let me share one example of the kind of question that Dan examines: suppose you go around to your mother-in-law's house for dinner. You have a good time. At the end, you pull out your wallet and say "Pam, I had such a great evening. What do I owe you?" Silence falls. You open your wallet and say "Would $300 cover it?" No one says a word and your wife looks daggers at you.


Now let's rework that scenario: suppose you go around to your mother-in-law's house for dinner. You give her the $10 bottle of wine as you enter the house. She thanks you warmly and leads you inside.

Think about this on a rational level: why would your greater gift be offensive? Surely it shows a greater appreciation for her hosting of the evening? But we all know that it would not be perceived that way. And we all know this; ergo, it is predictably irrational.

Described by the Financial Times as "unmissable", this work, published by Harper Collins, is accessible but powerful and will make you look at your life and your choices in a new way. Please, please read it.



Learn more about Dan Ariely at www.danariely.com, the IDM at www.theidm.com and Andrew Lloyd Gordon at www.andrewlloydgordon.co.uk. Harper Collins can be found at www.harpercollins.co.uk and the Financial Times at www.ft.com