Predictably Irrational Dan Ariely Analysis

811 Words 4 Pages

From picking between two cereals to deciding who to take on a date, decisions affect us every day. Decisions might be perceived as easy to make but there is reason behind why we make the decisions we do. The book Predictably Irrational by Dan Ariely explores how we make decisions. Dan Ariely is a Professor of Psychology and Behavioral Economics at Duke University. In addition, he founded the Center for Advanced Hindsight, and is the author of multiple books (Ariely). Ariely uses the concept of behavioral economics to help prove how decisions are made. He aims to answer: What influences our decisions? In the book, Predictably Irrational, Ariely explains how decisions are made very well by using experiments to support his thesis.

Predictably Irrational examines the rationality of decisions people make on a day to day basis. Ariely explains that decisions are not what we would expect them to be, instead they are predictably irrational. Irrational decisions are necessarily smart and rational; they are influenced by the scenario in which a decision is made. Ariely frequently uses the term behavioral economics, …show more content…
These experiments help us understand why decisions are made “irrationally”. For example, Ariely conducted an experiment that showed that “people are willing to sacrifice the pleasure they get from a particular consumption experience to project a certain image to others” (Ariely 315). This study was conducted by watching how people order beverages on paper compared to when said out loud. People tend to prefer different beverages on paper, but when with a group of friends ask the waiter for a different beverage, to create an image for their peers. To better prove his point, Ariely incorporates other ideologies, such as the standard economics theory, to prove why behavioral economics is more accurate in decision

Meaning Of Empiricism

For example, they will say that happiness is open to interpretation. Psychologists take the subjective nature of emotions into account when they are testing their subjects. They could choose to assess people’s mental wellbeing, or use an equation which finds the ratio of pleasure to displeasure. They could even monitor the dopamine levels in the brain. “To understand the possible contributors to subjective well-being means that you need to drill pretty far down into the data, more so than often is evident from the reports we read in the news about which country makes it to the top of the happiness charts.” (Whitbourne 2014) Physiology has a lot of data on the brain functions and like the quote states above, you need to pry into the data to find an accurate measurement of what you are finding.…

Words: 753 - Pages: 4

Book Review: Predictably Irrational, By Dan Ariely

Book Review- Predictably Irrational The purpose of this paper is to review the book, Predictably Irrational by Dan Ariely and more specifically address a single concept discussed in the book. First, I’ll offer a brief synopsis of the book. Second, I will discuss the concept of the cost of social and market norms from the book. Lastly, I’ll connect the concepts of social and market norms in relationship to a select few concepts discussed so far in the class, ADM 560. Synopsis of the Book Predictably Irrational by Ariely presents a series of concepts, experimental findings, and personal stories related to how people make decisions and the research strategies he used over the years to confirm each concept.…

Words: 1201 - Pages: 5

Importance Of Behavioural Economics

Behavioural economics employs insights from psychology experiments to help explain examples of economically irrational behaviour, when dealing with consumer theory. The two most prominent ‘irrational’ preferences are reference dependence, and loss aversion. Although it is a fairly recent development, there have still been many papers written about behavioural economics; such as ‘On the Value of Incumbency: Managerial Reference Points and Loss Aversion,’ ‘The Forward-Looking Competitive Firm under Uncertainty,’ and ‘A Dynamic Model of Investment and Endogenous Growth.’ What connects the three of these papers is the focus of firm behaviour and how it affects firm production, as a result. The first paper, ‘On the Value of Incumbency: Managerial…

Words: 1204 - Pages: 5

Market Failure By Joseph Desjardins

A known defender for this model is economist Milton Friedman. One of two arguments in favor of this model is the utilitarian defense. Utilitarians argues that the morality of an action is determined by the total amount of good it creates and measured against the total amount of harm. In other words, as long as it benefits the majority, the minority is nothing to worry about. However, a flaw of this theory is that it is impossible to correctly determine the total harms and benefits of an action.…

Words: 1154 - Pages: 5

Predictably Irrational Analysis

With Predictably Irrational, Dan Ariely contributes to the growing list of books (Blink, Nudge, Freakonomics, Thinking, Fast and Slow) meant to challenge preconceptions of human rationality. Ariely’s book first begged the question about Israel’s proclivity for producing behavioral economists. Recognizing an insufficient sample size to justify that generalization and loath to assume more research in my waning days at the War College, I cast aside that thought to find lessons in Predictably Irrational that might aid my decision making efforts. Ariely asserts his book addresses human irrationality – the absence of reason – which is not only more common than most humans believe, but predictable. The book’s underlying assumption is that we are “pawns in a game whose forces we largely fail to comprehend”.…

Words: 1242 - Pages: 5

Neuroeconomics Essay

The behavioral results are intriguing on their own, but harnessing the power of neuroscience allows us to know more about why humans, including myself, are susceptible to these phenomena. The Ultimatum Game Sanfey (2003) set out to identify the role of emotion in decision-making through brain imaging of participants that played the Ultimatum game. In this classic economic test, two subjects are given a sum of money that must be shared between them however they choose. One subject plays the role of the proposer, and this person is tasked with making an offer for how to…

Words: 1686 - Pages: 7

Humor In Advertising Essay

There has been research on humor and its effect on cognitive dissonance that has found that it reduces the dissonance. Humor works as a cognitive reframing tool that reduces incongruity and tensions (Latta, 1999). The use of humor could help reduce cognitive dissonance when consumers have internal tensions concerning the product/service. When a consumer is debating whether to purchase a product, they feel tension and discomfort on whether or not purchasing will be wise decision. This dissonance can come from concerns regarding budget, competition, etc.…

Words: 1795 - Pages: 8

Importance Of Hyperbolic Discounting

In the field of economics the microanalyses of decision-making and habit formations are the cornerstone for understanding rational behavior. However, the expectation of rationality in all situations may be unrealistic, due to time and cognitive constraints. This does not undermine the fundamentals of economics, however, indicates that current models and definitions of economic decision-making do not take into account all pertinent variables. Take for example Herbert Simon’s (1982) bounded rationality. He suggested that a rational actor is cognitively limited by the bounds of the human brain, and therefore they will consider a limited set of options and pick whichever reached a certain utility threshold.…

Words: 1042 - Pages: 4

David Zinczenko's 'Don T Blame The Eater'

Another study conducted by Yale student, Ashley Gearheardt found similarities between substance abuse and food cravings using brain imaging. “the dulled restraint-related brain activity that takes place when a food-addicted person drinks a milkshake may parallel what happens with alcoholics who take a sip of alcohol and then can't stop drinking, the findings suggest.” The study suggests the images of food alone can affect the parts of the brain that are responsible for self-control. The sheer numbers of fast food contribute to personal responsibility as everyday passerby in America are influenced by the images of food posted on the establishments. Unhealthy eating habits are caused by this which leads to childhood obesity and personal…

Words: 1188 - Pages: 5

Happiness Is A Glass Half Empty Oliver Burkeman Analysis

Happiness is a Glass Half Empty The phrase, ‘You are what you eat’, influences people to analyze their nutrition and diet and modify their lifestyle. However, people rarely stop to think about or even consider that ‘You are what you think’, and that this form of living vastly affects an individual’s life. People in general perceive and measure happiness by how successful they are in life. Oliver Burkeman, author of the “This Column Will Change Your Life” section for The Guardian Newspaper, writes in detail about the way human thinking affects their feelings of happiness. The article, “Happiness is a Glass Half Empty”, by Oliver Burkeman, elaborates on the idea that happiness should be perceived in a negative way to achieve a higher level of…

Words: 771 - Pages: 4

Predictably Irrational Dan Ariely Analysis

Related Documents

Meaning Of Empiricism

Book Review: Predictably Irrational, By Dan Ariely

Importance Of Behavioural Economics

Market Failure By Joseph Desjardins

Predictably Irrational Analysis

Neuroeconomics Essay

Humor In Advertising Essay

Importance Of Hyperbolic Discounting

David Zinczenko's 'Don T Blame The Eater'

Happiness Is A Glass Half Empty Oliver Burkeman Analysis

Related Topics

Ready To Get Started?

Discover

Company

Follow