Predictably Irrational: A Complete Summary - The Hidden Forces That Shape Our Decisions
We are pawns. Most of the time we don’t understand what’s really going on. We think we’re in the driver’s seat and steering the course of our lives, but we are wrong. We’re really the victims of our own instincts and impulses. We procrastinate. We underestimate. We let fear make our decisions.
Standard economic theory assumes that we are rational, but we are not. Most of the time, we’re deeply irrational. Just because we’re irrational, however, it doesn’t follow that we’re chaotic. Our behavior isn’t random. As a matter of fact, we make the same mistakes over and over again, and there is nothing random about that. There are predictable patterns in our behavior. We have instincts that help us negotiate a complex world, and these instincts tend to channel us into repetitive behavior so that we don’t have to spend a lot of time making decisions about things that aren’t essential to our survival.
Traditional economics posits a world where people act rationally and make economic decisions based on their own best interests. But this unrealistic, and frankly simplistic, worldview does not advance economic understanding. Economics should be based more on how people really behave. This is the goal of behavioral economics, a field that uses psychological insight to understand economic decision-making.
In Predictably Irrational: The Hidden Forces That Shape Our Decisions, Dr. Dan Ariely looks at self-defeating behavior, the power of suggestion, of procrastination, the effects of placebos and many other aspects of our lives that we are often unaware of. Delusions and self-rationalizations lurk behind many of our actions, subtly undermining our best interest. Only until we learn and understand how our primordial passions steer our lives can we regain control. Without this awareness, we are often at the mercy of advertisers and others who know how to use these hidden mechanisms to manipulate our behavior.
Ariely has an impressive resume, and he isn’t shy about mining it for anecdotes to support his argument. Readers are treated to many stories from his extensive back catalog of research experiments. The accounts aren’t just limited to his professional life, either. In addition to innumerable colleagues, readers are introduced to wife Sumi and daughter Amit, discovering intimidating details such as how Sumi came to the decision to use an epidural during childbirth.
Ariely seems to enjoy telling stories. Where one or two examples might suffice to explain his thoughts, Ariely uses five. While some readers may wish that the author would hurry up and reach his point, others may enjoy his meandering storytelling style. He provides interesting glimpses into the world of Ivy League professors.
The book concludes on a note of optimism. As irrational creatures, we are victims of illusion, but we aren’t helpless. We can learn to behave differently. Ariely rallies us to overcome our faults. We can develop systems to mitigate our predictable, systematic mistakes. There are tools and policies that will help people make better decisions. Ariely’s research provides concrete proof of what works to help guide us on our way.
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