The Predictable Irrationality of Life

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Clay

[Editor's Note: This is a guest post by Jonathon Howard of Di Mortui Sunt]

I just finished reading Dan Ariely’s Predictably Irrational: the Hidden Forces that Shape our Decisions. It is yet another book cashing in on the market’s love of laymen economics, in the vein of The Tipping Point and Freakonomics. Like its literary predecessors, PI claims to explain all the quirks of humanity through the lens of Econonics, which as a science has about the same amount of credibility as say your local weatherman. You know, the one with an associates degree in journalism.

To Dan’s credit though, his field of economics is called “behavioral,” and the field conducts experiments involving actual humans as opposed to trolling through vast fields of numerical data, making random odd pairs in the hopes of stumbling upon one that is correlated significantly enough and then screaming it from the rooftops, as an insightful, new view of human transactions.

Back to the book. Like I said, Dan’s ideas are backed by experiments. Experiments that Dan and his colleagues designed to answer questions like: “why do more expensive things seem to work better than cheap ones”; “why do we no longer bat an eye at paying 5 dollars for a cup of coffee when it used to be free at most places”; “why do we do things happily for free when we’d be insulted to do them if we were paid?” The answers he gets are enlightening, but often contrary to our expectations and intuitions. I wondered at times how Dan was able to extrapolate so much from some of his experiments and you might question his conclusions as well.

What I appreciated most about PI, though, is Dan’s efforts to help his readers overcome some of the flaws in our thinking and shore up some of that irrationality we all suffer from. Even if you disagree with the conclusions he draws from some of his experiments, the fact that we often act irrationally to our own disadvantage can’t be contested, our personal lives are full of examples, bringing this fact to light, to our the attention of our conscious self allows us to think about our actions and thought processes more fully and in so doing maybe help us highlight the mistakes we make in our economic transactions.

Which leads me to the next part of this post, Life Hacks. I’ve been reading recently the posts here at The Growing Life. Productivity hobbyists and the sites that serve them seem to suffer from the same ailment that Oprah’s fans do. That our problems in our life can be solved with things. It feels overly materialistic with a heavy covering of consumerism to boot. Life isn’t about things in all of their varied forms. Its about living and understanding how and why we live. Self-help technology can be helpful, as can Productivity sites, but they often do not provide the “fix” people are looking for.

Dan Ariely’s book brings to our attention the fact that we make all sorts of decisions without properly thinking about them, and anything that helps us examine our lives is something I can recommend.

-Jonathan Howard

Posted on 26 Apr, 2008

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7 Comments so far »

Clay Collins said,

Wrote on April 26, 2008 @ 8:22 pm

Jonathan,

Overall I really like your analysis (hell, I published it), but I’m wondering if you wouldn’t mind clarifying something. You say:

bringing this fact to light, to our the attention of our conscious self allows us to think about our actions and thought processes more fully and in so doing maybe help us highlight the mistakes we make in our economic transactions.

Which leads me to the next part of this post, Life Hacks.

I don’t fully understand the transition to life hacks.

Also, as somewhat of a fan of Oprah, I find it interesting that you say that “productivity hobbyists and the sites that serve them seem to suffer from the same ailment that Oprah’s fans do.”

Interesting that you differentiate between Oprah and her fans. Do you see Oprah as falling into the same materialistic camp as her fans? Also, would you say that Oprah does more harm than good?

Thanks for considering these questions.

–Clay
Jonathon Howard said,

Wrote on April 26, 2008 @ 9:03 pm

Dan doesn’t say it explicitly in his book but he is implicitly saying that much of our thinking is bad, faulty. He offers at the end of each chapters ways that perhaps we can work around these shortcomings of our thinking. Dan might not know what a lifehack is, but I do and some of his fixes are just that lifehacks. Ways to circumvent our hardwiring in order to be better. The connection to me was clear as day, but then I’ve been following David, Merlin, and Gina for quite awhile.

I didn’t actually mean to differentiate between Oprah and her fans. In my mind the two are synonymous. I choose to believe Oprah actually thinks things make people better, if she doesn’t then she’s really more of a monster. It’s the whole teach a man a fish thing, cliche? Of course, but all truisms are. Oprah doesn’t do that she talks about feelings and sets up Straw Men for her audience to knock down, everyone feels great but no change has occurred. If any of these things worked why would she be presenting a new one each week/month? They don’t her show isn’t about empowerment. It is about moving product with a nice gloss of feel-good.

For more on this check out Richard Birkenhead at Salon: http://www.salon.com/mwt/feature/2007/03/05/the_secret/
Khürt Williams said,

Wrote on April 27, 2008 @ 8:07 am

I think it is important not to label behaviors or ways of being or thinking as good or bad. I think it is more constructive to catch how our ways of thinking (from the past) influence how we make choices (in the present). If the choices we make are not consistent with what we want and with brining meaning and power to our lives then … we can make different ( nor better ) choices.
Robert said,

Wrote on April 27, 2008 @ 11:54 am

Khurt:

If a behavior has a negative consequence, is it still wrong to label it “bad”? What about murder? Or genocide?

Should we be only concerned about the things that we want and bring meaning to our lives? What about everyone else in the world? Do they mean nothing?
@Stephen Productivity in Context said,

Wrote on April 27, 2008 @ 5:59 pm

Can of worms, meet the can opener.
If you do not mind, I’d like to throw this(http://tinyurl.com/3qpkdp) into the mix. It’s my response to a post by Nick Cernis on the Productivity Movement.

I will say it again, “Keep it in context.” Whatever “it” is for you.
The Financial Philosopher said,

Wrote on April 28, 2008 @ 10:14 am

The fact that humans seek the rewards of the material world goes back to primitive man. Our brains are wired for simple, survival-oriented behavior. Our primitive brain, also known as the “rat brain,” seeks patterns or short-cuts to these rewards, much like a rat learning the shortest route to a block of cheese. The primary problem with us humans is that we choose the wrong “rewards,” which are only short-term and come from external sources. Once the reward is obtained, we begin the search for the next reward…

The material world likes to promote its offerings, such as the mass-media promotes the idea that we should have bigger homes, bigger cars and more “stuff” to make our lives better. If we can find shortcuts (i.e. hacks), then that is the preferred route, as opposed to the longer and more rewarding route to self-awareness.

Fortunately, as known by philosophers for centuries and recently proven by neuroscience studies, humans have the ability to change the make-up of the brain and form better habits while minimizing or reducing bad ones. We can “train” ourselves to think differently by “thinking about thinking,” much the way that Buddhist Monks can train their brains to think a certain way. This self-awareness brings happiness or well-being from internal sources, as it should be, as opposed to external sources, as our rat brain and material world friends would have it…
Daniel Richard | Winning Everyone said,

Wrote on April 28, 2008 @ 2:07 pm

My take on decision in regards to the “5-dollars-per-cup-of-coffee” part is that by having a store in a place where it is built and has already been serving a huge crowd before having a new coffee joint put in place, unknowingly teaches us (as the audience) that it is normal and fine to pay 5 dollars for that cup of coffee, rather than going all the way to another place to pay for something that costs 5 times lesser.

The store being there already solved one of our thinking process by eliminating the inconvenience factor and helped us speed up our decision process making, biased towards the “it is ok to buy here” mentality that the store has just by having a prime location.