Sunday, June 5, 2011

Predictably Irrational by Dan Ariely

Not my usual sort of thing, but very interesting.

The basic premise of much of our society is that the expectation in a decision situation, be it economic/financial, political, or dietary, is that we rational human beings will behave in a rational manner, considering the options and making a "best" decision based on the available data. Apparently, this is not at all the case. Whether the decision in question involves purchasing a car or a breakfast cereal, choosing a dog or a doughnut, or whether or not to cheat on our taxes, we are led to irrational choices by irrelevant factors. In addition, this irrationality is measurable and predictable.

I found particularly interesting the section on cheating. In one test, they had the participants do a recall exercise before the actual experiment. One group was asked to recall ten books that they read in high school. The other was asked to list as many of the ten commandments as they could remember. They used a control group which had no opportunity to cheat to establish a baseline for scores on the test. The book list group cheated, the ten commandments group did not.

In the US, members of a group ordering in a restaurant are likely to order something they don't particularly want if someone in the group has already ordered what they really wanted. In China the situation is reversed. Americans want to be thought unique. Chinese want to be thought respectful.

Interesting stuff. By the way, Ariely suggests that we decide what we want to eat in advance and if possible order first - or at least announce our intentions to the group before ordering.

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