Kathrynn's Reviews > Predictably Irrational: The Hidden Forces That Shape Our Decisions

If I had to describe Predictably Irrational using two words they would be "thought provoking." The author is a professor who was injured in an explosion in Israel. He suffered severe burns and 5 years of therapy. He used this "down time" to ponder the why's and how come's of life. Using many experiments he (and others) tested the moral aptitude and other aspects of human behavior.

Each chapter has several experiments that pertain to a topic.

Chapter 1: The Truth about Relativity: Why Everything is Relative--Even When It Shouldn't Be

The author uses an example of shopping for a house in another part of the United States. He says, people accustomed to their own housing market set a mental "anchor" and expect to pay a similar price for a home elsewhere. Relativity. However, if a person were to rent a home in their new location, they--eventually--adapt to the higher prices and will not be so sticker shocked.

Chapter 2: The Fallacy of Supply and Demand: Why the Price of Pearls--and Everything Else--Is Up in the Air

Interesting, but true. The author uses black pearls as an example. When black pearls first came out businesses couldn't sell them. Had to market them by placing them in fine jewelry stores surrounded by diamonds and emeralds, place a high price on them, then people wanted them. He calls this "arbitrary coherence." Talked about how initial prices are arbitrary and can be influenced. So true!

I thought it was interesting the way the author talked about stores who want to sell a certain, say t.v. It may not be the best that they have, but that is their target sell. They use three t.v.s, one very expensive, one middle of the road and one fairly inexpensive to test our mettle. Most will choose the middle of the road and that was the overall goal of the store.

Chapter 3: The Cost of Zero Cost: Why We Often Pay Too Much When We Pay Nothing

Interesting. We all tend to have an idea of how much we should earn or how much a particular service should cost. The author calls this an "anchor." There was a master martial art instructor that gave free lessons. When the students asked to pay him, he told them he did it for free because they could not afford him if he charged.

Another example was AARP asked a group of lawyers if they would be willing to provide legal services to some of their elderly members for $30 p/hour in lieu of their usual rate of $200 p/hour. The lawyers said, no. But when they were asked if they would do this service for free, they said yes.

Why? Because they had it set in their minds what they were worth. Anchor.

Chapter 4: The Cost of Social Norms: Why We Are Happy to Do Things, but Not When We are Paid to Do Them

This chapter dealt with social norms and market norms and what happens when they collide. An example was a large family Thanksgiving dinner and a guest decided to pay the hostess $300 for the meal, she was offended. Why? Because he used a market norm ($) to pay for a social norm. When a bottle of wine would have been considered very gracious.

Another example was if you ask a friend to help you move. They do it for free. But if you have the friend help you alongside a moving company that you are paying. That's a no-no.

Chapter 5: The Influence of Arousal: Why Hot Is Much Hotter Than We Realize

Well, I'm going to sum this up by saying that men (they didn't use women because men could become aroused faster) that were masturbating were more likely to accept or do things (sexually) that they wouldn't consider in a calm(er) state of mind. Examples were: wearing condom, three somes, rape, etc.

Little note that the author made a good point about the abstinence vs protection debate. Teens and people WILL not think clearly in a heightened state and thus do things they would not have done otherwise.

Chapter 6: The Problem of Procrastination and Self-Control

He taught classes and each class he told the students they had to submit 4 papers. One class got to decided their own due dates. They could select the last day of class, because that's when he would start grading them. They selected incremental dates. Another class he told to turn in 4 papers by the last day of class. They did the worst. Obvious they waited until the end to pull off those papers.

Showed that we need to set limits to achieve goals. Whether dieting, saving, etc.

Chapter 7: The High Price of Ownership: Why We Overvalue What We Have

Self-Explanatory

Chapter 8: Keeping Doors Open: Why Options Distract Us from Our Main Objective

Yikes! People hanging on to old loves, just in case, but dating new people. Several experiments that showed how we like to keep our options open in all aspects of our lives.

Chapter 9: The Effect of Expectations: Why the Mind Gets What It Expects

Talks about how previously held impressions can cloud our point of view. Did not care for the football analogy! We will pay more for the same coffee if served in a nice atmosphere.

Interesting that he mentions how advertising a product can build a reputation for the product; thus, we are expected to like it better.
I disagree. Books come to mind first. Movies second. Many times, movies the critics ripped apart, I enjoyed.

Chapter 10: The Power of Price: Why a 50-Cent Aspirin Can Do What a Penny Aspirin Can't

We expect the name brand product to work better than generic or store brand.

Chapter 11: The Context of Our Character: Why We Are Dishonest, and What We Can Do About It

Oaths of office from white collar professions and how they have degraded and why. Congress, lobbying, doctors accepting "incentives" to prescribe drugs. Interesting.

Chapter 12: The Context of Our Character (part 2): Why Dealing with Cash Makes Us More Honest

We tend to be willing to steal a pen from our place of employment, but not money from the petty cash to go buy a pen. Talked about the recent "police blotter" newspapers with business scandals.

Chapter 13: Beer and Free Lunches: What Is Behavioral Economics, and Where Are the Free Lunches?

Overall, I enjoyed this book. Felt the author spent too much time explaining in too much detail his experiments, though. Could have been summed up faster. He tended the ramble. Sorry. However, the ideas presented were interesting.

Did not agree with the author's idea to help us curb our spending habits, though. He suggests we agree to spend x amount on certain things p/month and when the debit/credit card shows that x amount is exceeded there would be consequences. No wonder the bank never called him back.

Liked his idea to help with our health care. He felt doctors should provide incentives to health prevention. For instance, have a patient submit a $100 or $200 deposit for a cholesterol screening that they get back when they make the appointment. Interesting because prevention can be a major key in cutting health costs.