BOOK REVIEW The Error of Our Ways

‘Predictably Irrational’ Highlights Oddities of Human Decision Making

Predictably Irrational: The Hidden Forces That Shape Our Decisions

By Dan Ariely

Published by HarperCollins

Available Feb. 19

Does anyone believe that humans are rational? Or are we nothing more than victims of our impulses and emotions, careening randomly from one bad decision to the next like a drunken rodents? In a loosely strung collection of simple experiments, Sloan Professor Dan Ariely argues in “Predictably Irrational” that we behave in ways that fall short of rational, but are highly systematic.

In arena after arena, Ariely cites studies that show that our ability to optimize is far from optimal, and that simply possessing intelligence, good intentions, and moral standards are no match in the lurch for our irrational selves. But all is not lost; with the enthusiasm of a true self-help writer, Ariely exhorts us to take account of our natural propensities and biases in order to make better decisions as individuals, and build better structures as a society.

There is an excellent chapter on social versus market mindsets and transactions, and the different value sets that prevail. For example, it seems that people are willing to work for free (as a social transaction) and when paid (a fair price), but hardly at all for something in between (an unfair price). Such findings seem especially relevant in an environment like MIT’s where the boundaries between home and school, professional and social relationships, work and play are vitally blurred. Further, Ariely makes a convincing argument for how this plays out in the rest of the world, when businesses spend money to promote an image of themselves as friends, partners, helpers, but then lose those social gains when they fail to hold up the other end of the social contract (reciprocity, health care, flexibility).

Another section explores the idea of foolish consistencies, insightfully presenting habits as a kind of intrapersonal herd behavior, where each person can be seen as a collection of selves, each one at a different point in time, looking back at the previous ones for cues on what to do.

Given that many of the experiments took place at MIT, it’s also fun to think that some of us may have contributed as guinea pigs (or at least walked by) as the findings coalesced. For example, do people prefer a Hershey’s Kiss, or a Lindt truffle discounted by the price of a Kiss? Locations also star in the book, from Walker to W20 to East Campus, which is graced with the parenthetical “and believe me — it takes a serious misfit to be a misfit at MIT.” (See page 141 for the full description.)

Perhaps the greatest disappointment is that much of what is offered up in this new book is not exactly news. Versions of many of these experiments lead a fulfilling life in elementary psychology textbooks, while more specific findings have been covered in the popular press. And in the 30 years since Kahneman and Tversky’s Nobel-prize winning work on human decision-making, do even economists truly believe that humans behave optimally all the time?

Ariely assumes a straw man when he writes “I have described experiments that I hoped would be surprising and illuminating, because they refuted the common assumption that we are all fundamentally rational.” Nowhere does he define what he means by rationality. Is it the same thing as maximization? Or consistency? In a broad sense, one might argue that many of Ariely’s subjects were behaving rationally when they chose what they wanted, even though they didn’t maximize what they might have under other circumstances — it was simply that their rationality was highly context-dependent. And while context-dependent behavior may trip us up from time to time, it’s certainly a useful and adaptive trait much of the time.

Elsewhere, the book is less enjoyable when it wanders into Feynman-esque descriptions of the author’s own charm, cleverness, or personal experiences. While the account of his travails as a burn victim is vivid and occasionally horrifying, it serves primarily to distract from the rest of the book. Other anecdotes (How do I choose between MIT and Stanford? An old fellow student recognized me in a bar and thought I was a waiter!) are neither interesting nor informative. Sometimes the need to show off comes out directly, as in the chapter on free! stuff where the extra punctuation makes his point (over and over again). Or in the footnote where he reflects on “how much people confide in me.” To be fair, not all the chortling left me cold — there’s a hilarious section on the possibility of using your slightly-less-attractive friend as a decoy to lure more suitors. And the writing is consistently clear and approachable.

Unfortunately, the general air of reasonableness and credibility is marred by decidedly unsupported statements such as “In recent years, we have seen business in general submit to a lower standard of honesty.” Is this really true, or just an example of an old fogey griping about our degenerate age? There are worse examples of carelessness, if not outright chauvinism. He labels Iran, China, and Latin American as “societ[ies] without trust.” Perhaps he meant that there was less institutionalized abstract trust of the kind that fosters efficient business transactions among strangers. Or perhaps he really did mean that there is less trust, period, between people in those societies.

In his eagerness to offer easy answers and neat summaries, Ariely leaves the deeper questions unplumbed. Is there an over-arching theory that can explain why we think the way we do? Why these particular irrationalities and not others? He doesn’t hesitate to throw out solutions to our problems (war, unsafe sex, dubious business practices), but the shallow analyses address such a small slice of the larger problem that they are not particularly convincing. For example, does he really believe that the problems (even the most pressing ones — affordability comes to mind) of such a complicated hydra as the American health care system really be “fixed” simply by having people schedule preventive medicine appointments? Ariely writes that “simplification is one mark of real genius.” It may be the only one this book exhibits.

In the end, I’m still not sure if the book is actually dumbed down, or if this is all Ariely has to say: “In a search for the root of this human condition, we decided to set up a series of simple experiments.” So perhaps that’s all there is: worth a flip-through at the airport bookstore.