Fantastic Read: Predictably Irrational by Dan Ariely

Predictably Irrational by Dan Ariely is a truly fantastic read. I haven’t read a book this insightful and captivating in quite a while. Even though it’s a non-fiction book I was sucked into it like by a good thriller.

In this book Ariely describes several experiments from his research that revealed some very interesting insights into the way the human mind works. even though I consider myself a pretty rational personal there a couple of situations described in the book that I too would have fallen victim to. Here are the two experiments I found particularly striking.

The first was about pricing and how objectively irrelevant pieces of information influence our decisions (I can’t recall the exact numbers and have lent my copy of the book to a co-worker, so this example may not be exactly as described in the book). Suppose a magazine offers two types of subscriptions: either (A) online-only for $80 or (B) online and print for $125. Given these options, some people would chose option (A), others would chose (B); The exact numbers are irrelevant. In a variation of the experiment, a third option was introduced: (C) print-only for $125. Obviously, (C) is inferior to (B) so nobody would ever choose (C), as they can get more value for the same price with (B). And this exactly what happened, when people were asked to choose between the three: nobody chose (C), but – and here is the interesting part – this seemingly irrelevant offer made people more inclined to pick (B) and less people ended up opting for (A). Even though the decision people had to make – whether the print edition is worth an additional $45 to them compared to the online-only option – thanks to the newly introduced option, (B) now looked more appealing in relation to (C) and this in many peoples minds also made it look better overall.

The second experiment I found most noteworthy is concerned with cheating. Ariely set out to see what students would do when given an opportunity to cheat on an exam. On the exam, four different groups of students were given a list of questions to answer. For every correct answer they were paid a small amount of money. The first group had their answers checked by the proctor, so they had no chance to cheat (this was the control group). On average, this group got x% right (again, the exact numbers have escaped me, but they don’t really matter anyway). Group #2 graded their answer sheets themselves and then destroyed them. Consequently, the proctor could not verify their claims of how much they got right and just paid them for what they claimed they had gotten right. As one might expect, on average they claimed to have given more correct answers than the first group. The set-up for the third group was the same as for group #2 (self-grading which allowed cheating without a chance of detection), except that they were asked to recite the Ten Commandments before taking the test. They didn’t have to get them right (that wasn’t part of the test), but apparently merely thinking about these moral guidelines made this group more honest and they reported scores approximately equal to that of the first group (who had no chance to cheat). Even more surprising were the results for group #4: Instead of reciting the Ten Commandments – which might not be a workable solution to cheating in a secular school or university setting – they were asked to sign that the test was subject to their school’s honor code. And again, the results were about the same as for the non-cheating group #1, thinking of honor made the students more honest. The interesting bit is that MIT, where the experiment was conducted, doesn’t even have an honor code! The mere thought of one apparently made the students more honest.

These are just two examples of the great and often surprising experiments Ariely describes in Predictably Irrational. There are plenty more in the book, so I recommend you order your own copy; the paper back is currently on sale at Amazon.co.uk.

February 2011 Update: I can also highly recommend Ariely’s follow-up book The Upside of Irrationality.

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