Amazon.com: Customer reviews: Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions

“Predictably Irrational: The Hidden Forces That Shape Our Decisions” by Ariely Ariely (PI), was an interesting read, and deserves to be looked at by economist, psychologist, marketer, or just people looking to improve their selves alike. It follows the trend, set by Freakonomics, by Steven Levitt and Stephen Dubner, in discussion of esoteric economic concepts, but without the academese that tends to keep casual readers away. I found myself personally engrossed while reading this novel due to the parallels of irrational behavior I discovered I also exhibited and will be actively correcting. The following three I believe have sentimental value to me and I feel are genuinely worth discussing.

Zero cost irrationality as described by PI is the concept that reviews the large bias humans show towards “free.” I put free in quotations as I am using the term loosely in this context as often the decision chosen is not without cost, and in relative terms, it is often not the option that held the most value per unit of the exchanging intermediary item. In fact, just a few hours before writing this brief review, I purchased three Publix cloth shopping bags that I had no intention of purchasing beforehand, but because they were buy three get one free. I can say in earnest, without that free offer, I would have completely shrugged off the Publix bag, to purchase at another time. A potential solution to this problem, derived from a specific example he mentions within the chapter, is to mentally give the “free” item a price, even one as low as one penny. This, surprisingly, nullifies the zero cost irrationality for most individuals, allowing for proper cost-benefit analysis of the additional item or offer.

Procrastination, or the giving up of long-term goals for immediate gratification, this desire for immediate satisfaction permeates particularly strongly throughout American culture. The effect of this national procrastination can be seen by abhorrently low national saving rate, or more implicitly or healthcare system that is more reactive than proactive. Though I personally am not a pure procrastinator, in fact many would consider me an extrovert, I believe that there quite a bit I still put off that I do so exactly because I fail to properly evaluate the opportunity cost of the long term benefit of said action. For example, I did a quick back of an envelope calculation of me putting of my savings to next year, rather than not starting when I begun work two years ago. This three wait has cost me over half a million dollars (Assumptions: Roth IRA, with locked six percent APR, maturing in fifty years). I have begun taking Ariely’s advice, and setting hard deadlines for many things, such as this particular book review which I gave myself exactly the day after completing the book to complete, no exceptions and no excuses.

The final personal irrationality I’ve found plaguing my decision making has been that of `keeping doors open,’ or not being able to stand the idea of closing our alternative options. My irrational in my context, has to do with maybe not a plethora of options, as emphasized within the book, but rather when I am down to two options that have to deal with something within the social sphere. Case in point, I would fret over the decision of whether I should continue to chase after a girl or letting her go, or going to a party where I would probably feel uncomfortable or not, though these examples may seem simple to an someone else, I struggled with these decisions constantly. Often than not, I found myself unable to take the choice that errs on the side of negative (deciding to stay home, or leave the girl alone) as I felt doing so eliminates a multitude of options without producing any new ones of benefit. I am curious to whether how much confidence has to do with the exact experiment presented within the book. I speculate if participants were required to self select as confident, or perhaps anchored to think of confidence, if such decisions become easier. I wonder this, since many my such decision-making gridlocks underlie a lack of self confidence, perhaps those with more of it at the time of the test may change results. In sum, Ariely’s solution, as I interpret it, the cure for procrastination is really premised by self-confidence, where one sets long term goals and bravely commits to them.

The book discussed around 14 irrationalities in total across 13 chapters, each holding a slight new scope of human cognizance to gain. The three above mentioned irrationalities after a deep introspective look, I felt held the most personal utility. I genuinely I have a new lens to the world. I genuinely believe that holds the potential to enrich the perspective of most readers as well, no matter their relative amount of academic background on the subject.