Predictably Irrational: The Hidden Forces that Shape Our Decisions

"Predictably Irrational" was a great read - a book that really made me think very carefully about a lot of the issues I'm facing today trying to start a business. Ariely's insights into honesty and pricing were particularly interesting.<br/><br/>The narrative style of this book made reading it a joy. Ariely's anecdotes and description of his personal struggle to recover from horrific burns made his forays into complex behavioral economics truly gripping. This book is a definite winner - a better version of Freakonomics."

"I've read a couple of books similar to this one recently, so I had heard of some of the studies before. The twist to this book is that most of the studies mentioned are the author's own. I enjoyed reading about them in the original researcher's own words.<br/><br/>The book is about the subconscious factors that affect how we think and act without conscious realization. It covers topics such as decision making, social commerce, placebos, and dishonesty. Here are some things it says:<br/><spoiler><br/> * Given two options (A and B) that are difficult to compare, adding a third option (-A), similar to Option A but worse, makes people more likely to choose A because it's clearly better than *something* by comparison (1-15).<br/> * Pages 26-29 give Ariely's own description of his famous anchoring experiment with the last to digits of social security numbers used as the anchors for auction items.<br/> * Our first anchor in a given category sticks with us even after we are given other potential anchors to replace it (31-6).<br/> * People will work as hard for free as for reasonable payment or for a gift, but they will work less hard (and be offended) by the suggestion of working for a small amount or for a gift with a mentioned price. Mention of money changes a social interaction into a market transaction (69-74). Turning market norms back to social norms is much harder (77).<br/> * People in a calm state cannot accurately predicts how they will make decisions in an emotionally-charged state (89-105).<br/> * People keep their options open for too long because we fear losing them by deciding on a single path. Ariely presented people with doors to rooms representing different ranges of money where each of 100 clicks either gave money or else moved to another room. The people could get a near-optimal amount of money if the doors remained open because they stayed in one room after finding out which was best; however, if the doors disappeared when left unused, the people wasted clicks running back and forth between rooms (139-53).<br/> * Because medical procedures are not usually tested in double-blind controlled experiments, many of them may actually be no more effective than placebos (173-6).<br/> * People will often cheat by small amounts when they can get away with it, but being less monitored doesn't make them steal more because their consciences hold them back at a certain point (195-208).<br/> * Reminding people of a code of ethics prevents them from cheating for a short while afterwards (206-8, 212-3).<br/> * Each step that something is removed from cash increases the likelihood that people will unethically take a larger amount (217-30).<br/> * Having people place orders at restaurants privately makes it more likely that they will order what they want. In Western culture, they are more likely to try to be different when ordering publicly, and in Eastern culture, they are more likely to try to fit in. In both cases, they sacrifice their own interests (231-8).<br/></spoiler>"