My rating: 4 of 5 stars
I first saw Dan Ariely present his notion of predictable irrationality in a video on tedtalks.com. He presented his ideas in a very entertaining manner, so I thought I would check out his book.
The book is almost a series of vignettes discussing various experiments that Dr. Ariely and his colleagues have done in the field of behavioral economics. They seek to answer questions like why a 50 cent aspirin provides more pain relief than a 1 cent aspirin, whether people are more likely to cheat/steal if the theft is not directly tied to cash, why people (especially Americans) spend everything and don’t save for the future, why people at restaurants will order something they don’t really want based on what others at the table have ordered…the list goes on.
Behavioral economics proves that people do not make purchases based on rational decisions and based on a fact-based cost-benefit analysis, the way that traditional economics does. This book offers an entertaining insight as to why we do what we do.