Predictably Irrational: The Hidden Forces That Shape Our Decisions, by Dan Ariely (New York: HarperCollins, 2008, 308 pp.)
Dan Ariely’s Predictably Irrational: The Hidden Forces That Shape Our Decisions is a highly readable treatment of what psychologists and behavioral economists call decision-making biases. It begins by knocking down the easy target of traditional economics model of the utility-maximizing economic man. Using lucid summaries of experiments, it proceeds to demonstrate many phenomena that should be familiar to most consumer researchers: the endowment effect, price lining, anchoring effects, intrinsic versus extrinsic motivation, social versus market norms, immediate gratification, placebo effects, price–quality inferences, ethical priming, and so on. The style of presentation is engagingly conversational as Ariely helps reveal how people shortchange themselves in the marketplace because of various perceptual and judgmental biases. Undergraduate students will find this book fascinating, and even academics who are familiar with most of the original material summarized will find the book to be a rewarding read. First person is used throughout, vernacular expressions are abundant, and the studies are typically presented as resulting from a dinner conversation with “Bob” and “Sally,” who are inevitably brilliant researchers at prestigious private universities. Dan and his dinner or pub companions become curious about some seemingly strange observed or hypothesized behavior and proceed to design deceptively simple experiments that demonstrate the behavior in the lab and then cleverly explain it. This is often followed by advice on how to avoid this trap (e.g., save more for retirement by pledging to set aside part of future raises rather than current income) or how to take advantage of the bias he and colleagues have demonstrated (e.g., at a singles bar, bring along a slightly less attractive friend so that you will look better in comparison). Those who have seen some of the author’s video clips on his Web site (www.predictablyirrational.com) will find the same sort of revelatory, puckish, and witty treatments in his book. The Web site also shows how a media-savvy academic can not only parlay some fairly well-known research insights into a best-selling book but also reach a far broader audience than academics normally achieve.
Although cleverly wielded, the only technique in the toolkit here is the experiment, a method Ariely praises as the epitome of science. Given the constraints and limitations of experiments, however, some might question the extrapolations and implications offered throughout the book. For example, because laboratory subjects were more likely to cheat on a tempting task when they received a redeemable token than when they got cash for correct answers, Ariely suggests that the executives of Enron found it easy to cheat shareholders because the money they dealt with was abstract. Well, maybe,… but this sort of reductionism and wild generalization is dangerous and ignores, among other things, the social dynamics of organizational and business culture. Cultural influences are also ignored, though one study reported in the last few book pages demonstrates that uniqueness motivation is not as strong in Hong Kong as in the United States. The same Asian restaurant ordering context used for this experiment was used well to illustrate this phenomenon in Juzo Itami’s 1985 film, Tampopo. The difference is that Itami’s film offers a much more complete feel for a culture (in this case, Japanese), the role of food in people’s lives, and the role of power hierarchies in Asia. Although two-by-two experiments, such as those so well presented in Ariely’s book, provide a clear, isolated view of psychological effects on behavior, there are other methods, such as ethnography and semiotics, that are better able to capture social and cultural influences that shape consumer behavior.
So what can a student learn about consumer behavior from Predictably Irrational? Of the elements of the marketing mix, pricing is the factor examined most closely, and advertising is the factor examined least closely. Limitations of insincere relationship marketing are well illustrated when Ariely asks when was the last time your friendly bank manager called to gently chide you for an overdraft and assure you that there would be no penalty fee. Still, for all its counterpositioning, the book uses rational economic concepts, such as cost–benefit analysis, and views money as a simple medium of exchange rather than the mystified sacred symbol that Viviana Zelizer and others have shown it to be. So, in the end, this is not a revolutionary book, but it is fun, interesting, and passionately written. If you were to follow the book’s advice in deciding whether to buy it, you would put all emotion aside and tally up the net benefits of doing so. However, if emotional self-control is not your idea of the best way to make life choices, peek into the book on Amazon and see if it moves you.
—Russell Belk, York University