Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan ArielyMy rating: 3 of 5 stars
Context & Why I read this book
2021 is my "year of ratio & will" which means I am trying to learn all I can about rationality and willpower. Therefore, this popular book was kind of a must-read.
What is the book about as a whole?
This is your classic book on human irrationality, biases, and mental fallacies. Each chapter presents one of them and decorates it with some background information, references, and relatable stories.
The book's structure
The book is comprised of 15 chapters, each of which focuses on a different mental bias:
1. The Truth about Relativity — why all our evaluations are relative rather than objective.
2. The Fallacy of Supply and Demand — why "free" products don't follow the rules of the market.
3. The Cost of Zero — Why we often pay too much when we pay nothing.
4. The Cost of Social Norms — Why getting paid for something will make you loath doing it.
5. The Power of a Free Cookie — Why "free" can make us less selfish.
6. The Influence of Arousal — Why Sex sells...
7. The Problem of Procrastination and Self-Control — Why you cannot make yourself do what you want to do.
8. The High Price of Ownership — Why we overvalue what we have.
9. Keeping Doors Open — Why too many options distract us from our main objective.
10. The Effect of Expectations — Why your expectations can change everything.
11. The Power of Price — Why placebos work.
12. The Cycle of Distrust — Why distrust ripples through markets.
13. The Context of our Character, Part 1 — Why all of us are a little dishonest.
14. The Context of our Character, Part 2 — Why dealing with cash makes us more honest.
15. Beer and Free Lunches — Why you should pay the whole bill at the restaurant once in a while.
One lesson
There are many interesting tidbits in this book. One that I personally found of value it the distinction between social norms and market norms. The author says that we live in two worlds: one where social norms prevail and another one where the market makes the rules. Social norms are wrapped up in our social nature and our need for community. They include the friendly requests that people make of one another. Could you help me move that couch? Could you help me change this tire?. Market norms are sharp-edged: wages, prices, rents, interests. When you are in this realm, you get what you pay for. The recommendation now is to keep them precisely separated since mixing them always causes trouble. Going forward I will try to adhere to this.
Reading Recommendation / Who should read this?
The book was OK-ish. A lot I had heard before, some things were new for me as the social vs. market norms distinction. On the positive side, the book is written by a scientist who conducted many experiments in the field himself. So the content is as close to "primary literature" as you will get without reading the scientific studies themselves. Also, references and additional reading are provided. But on the other side, the book provides nothing new; it merely presents some science in a digestible manner. Unfortunately in a way that drags on and which makes it longer than it needs to be. Further, no index is provided. In total, this is a 6 out of 10 on my personal rating scale which means OK; the average read. Tangible weaknesses, but recommended with some reservations.
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