Tuesday, 5 January 2010

Predictably Irrational- Dan Ariely Book Review

I was given this for Christmas through secret santa (STILL DON'T KNOW WHO IT IS!?) we were playing...

304 Pages
ISBN: 978-0007256532

My cover of the book is different to the one listed on Dooyoo... my one features a gumball machine and gumballs sprawled around with only one coin in the machine... anyway this is irrelevant as the line "The Hidden forces that Shape our Decisions" already grabbed my attention.

The simple design, the use of colour and just the way the words work is enough to get anyone interested... I decided to read the blurb...

The book contains 13 chapters focussing on different aspects that we, as humans, may prove to be irrational in certain situations:

1) The Truth about Relativity
The best bit about this is finding out the marketing aspect of this, and why we, as consumers fall for offers and deals that are presented to us by making relative judgments on the deal. I won't give away how or why, but this made me think, "WOW" I will make sure I won't fall for anything again and definitely be aware in order to make better judgments in the future!!

2) The Fallacy of Supply and Demand
This chapter mainly deals with anchors and how we keep figures in our mind which influences our decisions at later life... I can relate in some ways in terms of buying things having been living in Hong Kong before here and hence thinking everything is more expensive... Anyway with the explanations in mind, I'm sure to be much MORE aware...

3) The Cost Of Zero Cost
This chapter is one of the most interesting. Yes, we all like free things, but WHY? This chapter deals with this question and the experiments they did really show the effects of FREE. I will definitely look out for this, and not be influenced in making the wrong decision just because something is free (I'LL TRY!!). For example, buying a cereal you didn't even want just for their free book...

4) The Cost of Social Norms
This is another interesting chapter that we can see in everyday life and in society around us. The chapter deals with the difference between paying someone to do something and asking someone to do it as a favour, and the implications when these two merge -> CHAOS!

5) The Influence Of Arousal
This chapter deals with the way our decisions change under extreme emotion and by a BIG amount!! How can we be aware of this and NOT make the mistakes we otherwise will make?

6) The Problem of Procrastination and Self Control
I personally procrastinate all the time, so reading this chapter was quite helpful... it doesn't really provide TOO much of an action point at a personal level, but does explain why and how we procrastinate and certain aspects we should be aware of.

7) The High price of Ownership
My eyes were opened from this chapter and I was made aware of the psychology revolving ownership, and how true it is! One of the obvious things we just ignore, but we must be aware of this in order to make wise decisions, especially with the idea of virtual ownership floating around in many purchase deals!

8) Keeping Doors Open
Wow this was an insightful chapter... did not realise that keeping doors open COULD be bad for you!!! Must think a lot about this in order not to make mistakes.

9) The Effect Of Expectations
Yes our expectations change the way we act and a empirical object can be viewed differently by two people... and how can we resolve must be more objective in thinking and removing our expectations!

10) The Power of Price
This was another WOWING chapter dealing with placebos and if price had an effect on the way we perceive things to be better or more effective and it DOES! How can we compromise the cost and the benefits? This is a revealing chapter, but I doubt I will change my lifestyle, won't read TOO much into it!

11) The Context of our character (Part 1)
This chapter deals with honesty, and if people, when given the opportunity, would cheat! Again, experiment outcomes are surprising that the different tests they did showed such a dramatic and shocking result. I definitely would cheat (depends what the situation is) but to see a general trend of what is shown is really reavealing!

12) The Context of our character (Part 2)
This second part deals with human dishonesty in relation to money and whether it will have any effect on the "amount" of dishonesty in us. Again, the results are surprising and this is interesting, but little personal points of action offered, only awareness.

13) Beer and Free Lunches
This is a nice conclusion to the book, and sums up what he aims to achieve in a final chapter that includes some experiments as well as ending on a more general note in regard to behavioural economics.

I especially like the way the book is put together. One topic relates to another and is referenced regularly and the links that they make are really understandable and simple to understand. They put it in such an order that anything they refer to further on the book is covered previously.

It says on the back that it will change your perspective and it truly does. Not only does it explain why we think or act in an irrational way, but gives ideas in how we can change or at least be aware why we do these things, and perhaps actively try to change.

However, you do have to think a lot. After reading this book, having gone WOW, you then think, OH what have I been doing and how there are so many things you could do and so many things to be aware of it is very overwhelming...

BEST CHAPTERS: The Cost of Zero Cost, The High Price of Ownership, The Effect of Expectations, The Power Of Price, The Context Of Our Character (Part 1)

I would highly recommend this book as it is not only interesting but insightful. Some things you may subconsciously realise you do, and this book makes you CLICK and just have a light bulb on your head and go EUREKA that's why I do that!!

It does focus heavily on economics and psychology, but made easy enough to understand and gives plenty examples and experiments conducted to prove points. However, it may not be for children, just not really a book they would enjoy. I would recommend for 12+.

As you can tell, many chapters in this book are extremely intriguing, and this is a book you can easily pass around to friends and family! There is something for everyone in it!

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