Predictably Irrational

Why do we buy things we don’t need? How is it that, in certain situations, we make decisions that contradict our stated preferences? Predictably Irrational is a book written by an expert in behavioral economics, a recent discipline that borrows from psychology and economics.

The author starts with the observation that we tend to overestimate the conscious portion of our decisions. Indeed, traditional economic theory stresses the rationality of the individual, that is, we are able to make decisions that benefit us through our capacity to reason logically. On a daily basis, we compare the choices offered to us before choosing the most advantageous. However, the science of behavioral economics shows that this is far from being true. We regularly make imperfect—even irrational—decisions, relative to our stated tastes and objectives. Should we conclude from this that man is incomprehensible?

In fact, Dan Ariely shows in his book that observed human irrationality is neither foolish, nor random. On the contrary, it is a recurrent and repetitive phenomenon caused by the functioning of our brain and a certain number of stable biases. As he progresses through the various chapters, he expands upon the findings of numerous studies and experiments which marketers will find extremely useful. We begin by discovering that the brain values nothing in the absolute sense. Value perception can thus be significantly influenced by playing on the elements of comparison provided to consumers. The almost irresistible attraction of getting something for nothing, above and beyond any objective justification, is also extremely edifying. Finally, the influence of our expectations on how we experience consumption, taking into account the well-known placebo effect, will provide marketers with many interesting ideas to enhance their offerings.

A serious, and simultaneously offbeat book that provides ample food for thought.