Predictably Irrational By Dan Ariely

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Dan Ariely is set out to disprove the common assumption in conventional economics that a consumer behaves rationally when he/she makes economic decisions, in his book, Predictably Irrational. With the help of thought-provoking, lucid and fun experiments, he discovers the irrational side of consumer behaviour. According to Ariely, we generally think that most of the decisions we make are well reasoned and smart but this is unfortunately not the case. We constantly overpay, procrastinate, underrate, overvalue, and fall for marketing tactics that we think we are too smart to be deceived by. But our irrational behavior is so consistent that it is predictable. The book deals with behavioral economics, a new field that applies insights of psychology…show more content…
He collaborates with other professors from various universities to carry out these intriguing, complex experiments. They, for the most part, use their students as the subjects. The results of most of these experiments are astonishing and unanticipated. For instance, to prove that the appeal of the container that condiments (to be mixed with coffee) are displayed in will increase the consumer’s ratings of the coffee, Ariely set up a coffee booth outside MIT for a week. From time to time, the containers were changed. Sometimes, they used fancy-looking glass containers and at other times Styrofoam cups were used. Occasionally, the Styrofoam cups were jagged. Despite the fact that none of the students mixed the condiments in their coffee (that remained the same), the its ratings were bad when the jagged cups were used and were extremely high when the glass containers were used! This experiment shows us how marketers successfully fool us into thinking that the value of a commodity is higher than it actually is. This was also the marketing strategy used by Howard Shultz during the early years of Starbucks. Other experiments include asking students to recall the Ten Commandments to test if it reduces the chances of cheating and, leaving dollar bills and cans of soda in communal refrigerators, to show that individuals are honest about cash but not soft…show more content…
Fans of these books will definitely enjoy Predictably Irrational. If you have read a good amount of books on behavioral economics then you will find the content of this book very similar to the rest. Most of the concepts discussed (like most other books on behavioral economics) are inspired by Daniel Kahneman’s, Thinking Fast and Slow. The major plus point of Predictably Irrational is Ariely’s witty humor and quirky experiments that manage to keep the book interesting. It is a great book to begin reading about behavioral economics, with. The book is enjoyable and informative. It has some great lessons to offer when it comes to economic decision-making which are very beneficial and applicable to our everyday
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