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Predictably Irrational Summary

9 min read ⌚ 

Rational thoughts. Rational decision. Rational involvements. Rational statements. Rational, reasonable, sound, sensible, rationalistic, judicious…

We “invented” plenty of words and syntagmas to define ourselves especially when it comes about our social image. Because when you have to play, day by day, on the social stage, you can’t afford to lose control, to make mistakes, to seem week. Unwritten laws of the subconscious do not allow you to do that.

Are we as rational as we pretend? Do we really hold the control of everything? Or, maybe we are just fooling ourselves. And even though we know how reality looks like we choose to “invent” our own truth.

Spend the next few minutes to take a look at some inspirational nuggets and the main ideas from Dan Ariely ’s book: Predictably Irrational: The Hidden Forces That Shape Our Decisions

Dan Ariely. Doesn’t need any introduction. Probably you have read Irrationally Yours.

Are we as rational as we pretend?

My goal, by the end of this book, is to help you fundamentally rethink what makes you and the people around you tick. I hope to lead you thereby presenting a wide range of scientific experiments, findings, and anecdotes that are in many cases quite amusing. Once you see how systematic certain mistakes are–how we repeat them again and again–I think you will begin to learn how to avoid some of them.

Take seriously the promise above. Because the author perfectly described how your lecture journey will look like.

Facing the mirror, admitting that we are wrong and finding wise ways to make some changes in our favor – those may define in brief the main purpose of Ariely’s book.

And through 15 chapters this purpose is beautifully designed around 9 main concepts. I will write below about 4 of them, in order to give you enough space to discover the rest of them in Ariely’s book.

DECOY EFFECT in a decision-making process. This concept is also known in specialty literature as asymmetric dominance effect and means that when you have to make a choice between two things, if there’s a third one it will make one element look superior and the other one inferior.

Let’s say that you have in mind to change your job and relocate. You have two offers: the first one is for NY, with an attractive salary package, and relocation expenses reimbursed and the other one is for Paris, also with an attractive salary package and relocation expenses reimbursed.

Suddenly appears a third offer: also for NY but with the same salary that you have now, and no relocation expenses reimbursed.

The last offer can’t be, for sure, the winner one. But this offer focuses your attention on NY, making the first offer looking superior to the second one – for Paris.

ORIGINAL ANCHOR PRICE.  Each of us has a mental map designed in our brains that confers us the comfort we need when we have to deal with something new.

For instance: when you first meet somebody, which will be the topics of the small talks? Weather, zodiac signs, favorite music genres. FULLSTOP.

You already have at least two criteria to define your companion. Is he a Capricorn? Certainty you already know that he is stubborn and ambitious. Does he like rock music? You know that you have in front of you a rebel, dominant communication partner.

Preconceptions or not, things are pretty much the same when it comes about the anchor price. A consumer NEEDS to settle a landmark price for each valuable object. Having settled in his mind this anchor price, he will be able to judge others only in relation to it.

On a larger scale, this kind of less rational judgment influences a lot the relationships between supply and demand. As Ariely concludes: the supply-demand relation is more based on memory rather than on preferences.

THE “FREE” EFFECT. If something is free, it will be such a waste to lose the chance to take it, right? I’m not ashamed to admit that I often think that way. “Zero” price is a good thing and it definitely means saving money.

 But saving from what? Is the thing we take even needed? Does it have the value we usually expect?

Predictably Irrational Summary

So, the FREE effect is just a trick for our own mind. That’s because, in reality, you may save some money for an un-needed “object”. But you also spend some “needed” and precious time only for taking advantage of the opportunity.

SOCIAL vs MARKET NORMS. Have you ever done a favor for a friend? For free? If your answer is YES – and I can’t imagine somebody without doing something like that – it will be very interesting for you to understand what these concepts are all about.

Money – the engine of a good motivation. This may be the mutually agreed leitmotiv of any successful corporation. It is also the hidden prerequisite of any job expectation. But a wired truth stands behind all these thoughts: we are more willing to do something for free, as a friendly gesture, rather than doing the same “job” for money.

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After this long run through these 4 concepts, it’s time to say FULLSTOP again. I’m tempted to tell you more about the next 5 but it will be not fair to spoil the magic of this book.

So, we are halfway in order to discover the full answer to the initial question:

Are we as rational as we pretend?

I received my answers by reading this book. Now it’s your turn. And you are not going to this “trip” with empty hands. Now you have in the backpack some great nuggets and a preview of what this book’s all about.

Predictably Irrational Review

The Hidden Forces That Shape Our Decisions

Revealing of valuable decision-making theories based on facts and insights coming from experiments in modern economics.

In this short book summary, we return to the fundamentals of Irrationality.

Who Should Read “Predictably Irrational”? And Why?

People underestimate the power of rational thinking. They think a person has that ability, since the day of its birth. Unfortunately, that is not the case! Many environmental, social, religious and cultural factors can distance you from rationality and affect your decision-making potential.

That leads us to the conclusion that this book is a good fit for everyone – no exceptions.

About Dan Ariely

Dan Ariely

Dan Ariely was born in New York area on April 29, 1967. Currently, Dan works at Duke University as James B. Professor of Psychology and Behavioral Economics with part-time appointments and meetings at the Fuqua School of Business, (Economic Department and the Center for Cognitive Neuroscience).

His Israeli-American nationality helped him to understand the best out of both economies. MIT’s Media Lab gave him the honor to educate students on multiple subjects as a visiting professor.

Dan Ariely is the author of many books including The Upside of Irrationality; The Honest Truth about Dishonesty; Predictably Irrational; Payoff and Irrationally Yours.

“Predictably Irrational PDF Summary”

At the age of 18 Dan Ariely, the author of “Predictably Irrational” suffered severe burns from an accident which occurred in his house.

He spent the next three years in hospital, contemplating and analyzing people’s behavior. This situation distanced him from his regular life routine; conversations rarely occurred, so he had a lot of time studying human nature. At the time, a new life started to emerge, so he immediately began to observe and analyze his life-managing abilities.

Due to the pain, Dan had to undergo a strict regimen of therapy beneficial for treating his wounds. Bathing became his daily routine; disinfection was a priority for tearing off old bandages of his body as quick as possible.

According to Dan testimony, the method for getting off these bandages was the difference between pain and aid; he preferred the slow and painless one. However, the nurses disagreed with Dan’s complaint and pinpointed the similarities which existed between those two.

As soon as Dan left the hospital, driven by passion, he researched the topic that troubled his mind. The goal was to invent a proper medical solution that will comply with his idea of a perfect treatment.

Although he was aware that he could not change everything within days; he continued the fight. This notion led him to see things differently, dare to express himself in a way characteristic of people with pure heart and clear vision.

Despite the judgmental behavior which became an integral part of a person’s character, he persisted doing “unreasonable things” and fight for what he believed to be righteous. Today’s economy is dealing with the same problems.

Many theories indicate irrationality as a problem that we, as people, must take seriously.

How to discover what people think and want?

Economic endeavors have one task – to determine the real depth and ever-present roots of human irrationality.

As stated in many columns written by renowned writers, “Predictably Irrational” is one of the greatest books ever written on decision-making abilities, finance, human psychology, and behavior – because it relates to many important subjects.

What is the best thing about Dan Ariely?

In spite of being a distinguished academician, his written expression is a blessing; his style is accessible even for kids.

Throughout its career, Dan encountered plenty of experimental programs and discoveries, in which he never agitates readers by using too technical jargons or words. A concise expression is his way, and thus long-lasting connections emerge between a reader and an author.

The book has an eminent and a practical side. It stretches far beyond the horizon of the known and enters into the unknown.

Every once in a while, quotes from spiritual essays and philosophers can be found in his texts, which proves Dan’s eagerness for knowledge and diversity. This book is recommended to help others build a strong character by enforcing a clear decision-making attitude.

Obviously, the “Predictably Irrational” book is not one of the bestselling books of the past decade for nothing. The society has developed various stereotypes about a person’s skin, age, race, beauty, intelligence, etc. These stereotypes make us irrational?

Take this situation, for instance: If a man is left home alone, he is more prone to cheat and to do other bad stuff, but If that same person is reminded about the ten commandments, the wrongdoing will take a downfall.

Key Lessons from “Predictably Irrational”

1.      People have a habit to cheat
2.      Independence versus Dependence
3.      What guys want in reality

People have a habit to cheat

Detailed experiments discover astonishing facts about the nature of cheating. The respondents who participated in the research revealed a truth about the chances of adultery.

Before a conclusion was made the participants were asked one last question? If they have an opportunity to cheat what would they do? 99 percent of them replied-It is not bad to cheat a little bit.

Independence versus Dependence

Have you ever find yourself in a situation where you had to order food that you didn’t like only because your friends or associates order it? Americans have a different attitude.

Their independence speaks for itself, so they prefer to buy unique stuff rather than going head to head with the community.

People from Hong Kong, for instance, do the opposite thing because they would feel ashamed if they didn’t adjust to society.

What guys want in reality

All men want only one thing – sex. What kind of sex? Well, they hardly ever say no to something.

Apparently, many different forms of sex, to stop the judgmental behavior from the community towards them, men lie about their sexual preferences.

Hetero or homosexual it doesn’t matter.

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“Predictably Irrational” Quotes

Individuals are honest only to the extent that suits them (including their desire to please others. Click To Tweet We usually think of ourselves as sitting the driver's seat, with ultimate control over the decisions we made and the direction our life takes; but, alas, this perception has more to do with our desires-with how we want to view… Click To Tweet Giving up on our long-term goals for immediate gratification, my friends, is procrastination. Click To Tweet That when given the opportunity, many honest people will cheat. Click To Tweet People are willing to work free, and they are willing to work for a reasonable wage but offer them just a small payment and they will walk away. Click To Tweet

Our  Critical Review

This book is designed to eradicate irrational behavior, to present a new rational perspective, capable of taking you to the next level. You must seize every opportunity in life, and how are you going to do that if you are not able to control your potential irrationality?

Until you decide what you’ll put in your shopping cart – including books – you have to think wise at your next decisions and try to predict irrational behavior.

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