Executive Times






2008 Book Reviews


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








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On the off chance that you’ve not yet concluded that humans are not fundamentally rational, be sure to read Dan Ariely’s new book, Predictably Irrational: The Hidden Forces That Shape Our Decisions. Ariely is a behavioral economist at MIT and thanks to the experiments he describes in this book, he offers insights that are both surprising and illuminating for readers. Here’s an excerpt, from the beginning of Chapter 9, “The Effect of Expectations: Why the Mind Gets What It Expects,” pp. 155-157:


Suppose you're a fan of the Philadelphia Eagles and you're watching a football game with a friend who, sadly, grew up in New York City and is a rabid fan of the Giants. You don't really understand why you ever became friends, but after spending a semester in the same dorm room you start liking him, even though you think he's football-challenged.

The Eagles have possession and are down by five points with no time-outs left. It's the fourth quarter, and six seconds are left on the clock. The ball is on the 12-yard line. Four wide receivers line up for the final play. The quarterback hikes the ball and drops back in the pocket. As the receivers sprint to­ward the end zone, the quarterback throws a high pass just as the time runs out. An Eagles wide receiver near the corner of the end zone dives for the ball and makes a spectacular catch.

The referee signals a touchdown and all the Eagles players run onto the field in celebration. But wait. Did the receiver get both of his feet in? It looks close on the Jumbotron; so the booth calls down for a review. You turn to your friend: "Look at that! What a great catch! He was totally in. Why are they even reviewing it?" Your friend scowls. "That was completely out! I can't believe the ref didn't see it! You must be crazy to think that was in!"

What just happened? Was your friend the Giants fan just experiencing wishful thinking? Was he deceiving himself? Worse, was he lying? Or had his loyalty to his team—and his anticipation of its win—completely, truly, and deeply clouded his judgment?

I was thinking about that one evening, as I strolled through Cambridge and over to MIT's Walker Memorial Building. How could two friends—two honest guys—see one soaring pass in two different ways? In fact, how could any two par­ties look at precisely the same event and interpret it as sup­porting their opposing points of view? How could Democrats and Republicans look at a single schoolchild who is unable to read, and take such bitterly different positions on the same issue? How could a couple embroiled in a fight see the causes of their argument so differently?

A friend of mine who had spent time in Belfast, Ireland, as a foreign correspondent, once described a meeting he had ar­ranged with members of the IRA. During the interview, news came that the governor of the Maze prison, a winding row of cell blocks that held many IRA operatives, had been assassi­nated. The IRA members standing around my friend, quite un­derstandably, received the news with satisfaction—as a victory or their cause. The British, of course, didn't see it in those terms it all. The headlines in London the next day boiled with anger and calls for retribution. In fact, the British saw the event as proof that discussions with the IRA would lead nowhere and that the IRA should be crushed. I am an Israeli, and no stranger to such cycles of violence. Violence is not rare. It happens so frequently that we rarely stop to ask ourselves why. Why does it happen? Is it an outcome of history, or race, or politics or is there something fundamentally irrational in us that encourages conflict, that causes us to look at the same event and, depending on our point of view, see it in totally different terms?

Leonard Lee (a professor at Columbia), Shane Frederick (a professor at MIT), and I didn't have any answers to these profound questions. But in a search for the root of this hu­man condition, we decided to set up a series of simple experi­ments to explore how previously held impressions can cloud our point of view. We came up with a simple test one in which we would not use religion, politics, or even sports as the indicator. We would use glasses of beer.

Predictably Irrational is a pleasure to read, in a writing style that’s engaging, as shown in the excerpt. The experiments noted at the end of excerpt point toward the basis on which Ariely has drawn his conclusions. I have a bias toward the reliance on data, and many of the experiments he’s conducted seem to provide ample facts on which to draw these conclusions. The next time you ponder an economist’s projection that’s based on expectations of rational behavior, think about Ariely’s perspective about irrational behavior, and how that can be predicted.


Steve Hopkins, May 15, 2008



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The recommendation rating for this book appeared

 in the June 2008 issue of Executive Times


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