Wednesday, November 05, 2008

Predictably Irrational, by Dan Ariely

Predictably Irrational: The Hidden Forces That Shape Our Decisions, by Dan Ariely

I was the only one of my friends that didn’t like this book. It was fairly interesting in parts, but I found the conclusions very strange. Arbitrary coherence says that although initial prices can be “arbitrary,” once those prices are observed they will shape how future ones are perceived as well. An interesting premise, and coupled with plausible experiments Ariely paints a solid picture of the concept. From this, though, he decides we can’t trust the market forces of supply and demand to set prices and we should instead depend on “a reasonable and thoughtful government” to regulate markets. Any discussion where it is argued that government should take a larger role I believe to have a heavy burden of proof, and this didn’t come close. Other chapters explore similar forces that influence behavior such as emotion, morals, and social norms but because of the whopping problem I had early on I had a hard time taking the rest seriously.

The writing was engaging and pleasant, even funny at times. One passage in particular made me laugh quite a bit: “How did he persuade the cream of society to become passionate about Tahitian black pearls—and pay him royally for them? In order to answer this question, I need to explain something about baby geese.” This reminded me strongly of an old Bill Cosby album I used to listen to with my dad, Revenge. There was a track named “Buck, Buck” that was one of my favorites. It told the story of a teen named Fat Albert (yeah, that Fat Albert) that was darn funny; after almost five minutes he reaches what seems to be the final punchline, pauses, and then says, “I told you that story to tell you this one” and immediately launches into another story. That struck me as amazingly hilarious as a kid and it has stayed with me to this day. Anytime I encounter similar phrasing (such as the line about pearls and geese) I always hear “Hey Hey Hey” in that unmistakable Cosby voice and grin. While this anecdote has nothing to do with the content of the book, it sure took me back and made me smile.

First Sentence:
One day while browsing the World Wide Web (obviously for work—not just wasting time), I stumbled on the following ad, on the Web site of a magazine, the Economist.

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