Predictably Irrational by Dan Ariely is a popular work on behavioral economics, a relatively new sub-specialty of the "dismal science." Written in an approachable manner, as if being presented to freshmen in college, this book serves an accessible introduction to the subject. Its aim -- to get the reader to "fundamentally rethink what makes people tick" -- is a bit overreaching, however.

Ariely comes to his subject with sterling credentials. He is the Alfred P. Sloan Professor of Behavioral Economics at MIT's Medial Laboratory and the Sloan School of Management, a researcher at the Federal Reserve Bank of Boston, and a fellow at the Institute for Advanced Study at Princeton. The story of how he originally became interested in behavior is fascinating and touching. A native Israeli, he was doing his military duty at age 18 when he received third degree burns over 70% of his body after a flare exploded nearby. During his long convalescence, he started to observe the behavior of others, which is what led him to the study of social science when he finally was well enough to attend university.

While a psychology course on the physiology of the brain first caught his attention, Ariely became more interested in why we people make repeated mistakes without learning from experience. This approach led him to examine behaviors around our economic interests, like why we find it so hard to save for retirement. In classical economic theory, people are assumed to make rational decisions. We all know that people are not rational about things such as what to spend money on. Behavioral economics is designed to show that while we many not be rational, we all make the same irrational choices, so they are predictable.

To make this point, Ariely discusses many economic topics and behaviors: supply and demand; the cost of "free"; making relative monetary judgments; the effects of social norms, emotional arousal, procrastination, self-control, multiple options, and expectations on the choices we make; price and the placebo effect; and cheating. For each situation, he provides a description of an experiment on the subject, mostly carried out by him and his collaborators. After discussing the results, he postulates how these results could change behavior: our own and that of businesses or government.

For instance, Ariely came up with the idea of a credit card that would help promote self-control in spending. It would be set up with spending limits and provide a number of services that could help people stop over spending, such as automatically e-mailing a loved one when spending is outside pre-set limits ("Dear John, your wife Jennifer has over-spent on shoes this month"). He even had meetings with a large bank and did his best to sell them the idea. Alas, they did not take him up on it.

Ariely makes some interesting observations and suggestions. However, the experiments he describes -- like offering random people in an MIT campus bar a free beer if they will take a taste test -- hardly seemed controlled enough to draw as broad conclusions as Dr. Ariely does. His bibliography is also quite sparse, with very few psychology journals referenced. Since he is primarily talking about consumer behaviors, it's not inappropriate that mostly economics publications are cited. However, he sometimes sounds like he believes he has discovered something new about human nature -- like when demonstrating expectations play a role perception -- when if he had consulted more of the psychology literature, he would have found this fact has been established for a long time.

Is the book interesting? Yes. Is it entertaining? Yes. As befits a book for the general public, Predictably Irrational is both.  Ariely does make some thought-provoking observations about human propensities and some of suggestions may be helpful, although his lack of reference to the literature of psychology, which he could have easily fit in even in his airy, conversational style, is a bit disappointing. Will the book change anyone's behavior? Likely not. I think the self-help book industry demonstrates that books are not good motivators for behavior change (although the desire to change behavior is a great motivator for purchasing books). Sounds like a predictably irrational outcome to me.

© 2008 Nancy Fontaine

Nancy Fontaine has a bachelors degree in psychology and masters degrees in liberal studies and library science. She has worked as a medical librarian and indexed literature on post-traumatic stress disorder for the National Center for PTSD. She currently works in development at Dartmouth College and writes book reviews for print and online publications.