The Upside of Irrationality

And now for Dan Ariely’s The Upside of Irrationality. Another book on behavioral economics – and I’ve been amply warned by my son the economist to beware of these sorts! The book has lots of amusing experiments and results – some of which are interesting and few of which are ground-breaking. And I’m not quite sure where the title comes from (maybe I’m missing the point – it certainly doesn’t seem to be a them of many of the chapters). The first section, focusing on work highlights how irrationality can shape our behaviors and suggests some things we might do to take that into account – but the only time I can think of where irrationality itself has an upside is in his discussion about how our irrational desire for revenge creates social pressure to do the right thing (true, perhaps, but problematic from a Christian context!). As for his constant shots at “rational economics” he does in a later chapter admit that people who behave “irrationally” do have reasons for their actions – hence, perhaps are less actually irrational than he has let on (though he makes this aside in a footnote).

Nevertheless, he identifies several principles with experimental support that make sense if you know people, such as: we value our ideas more than others, we value things we help create (the “Ikea effect”) more than those we don’t, we work harder and better if we feel our work is meaningful and larger financial incentives don’t always result in greater performance. There are fun experiments to support these notions that make great lunch room conversation (as I think I demonstrated today!), but these ideas don’t seem all that radical to me. There are some suggestions for how we might adapt to these realities – and it may be that the empirical side of the discussion may make it easier for us to act on them.

It’s a pretty easy read and some fun stuff. In the second half he moves from work to family. It’s worth a read if you’re interested in this.

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