Predictably Irrational: The Hidden Forces that Shape Our Decisions

       This book explains:

• How do we think about money? 
• What caused bankers to lose sight of the economy? 
• What caused individuals to take on mortgages that were not within their means?
• What irrational forces guided our decisions?
• And how can we recover from an economic crisis?

All classic economic theories are based on the assumption that consumers behave rationally, despite a considerable body of evidence to the contrary.It is only in the last 25 years that economists have begun to investigate the irrational side of consumer behavior.

Dan Ariely's book, "Predictably Irrational", offers a clear and comprehensive overview of this fascinating subject. If you are the kind of person (like me) who can't imagine using the words 'fascinating' and 'economics' in the same sentence, don't worry, the primary focus of the book is human behavior and its peculiarities, rather than economic theory.

Ariely explores why we stick with decisions once they are made. Reading his case studies allows us to reflect on our own habits and understanding their results. Irrational behaviors are neither random or senseless, they are systematic and predictable. We often make the same mistakes over and over again.Two sections that spoke to me were the explorations of predictably irrational as an explanation of our consumer and workplace habits.

As we spend our money, most transactions have a downside, but when something is free we forget the downside. Free gives us an emotional charge that causes us to perceive that the free item is more valuable than it really is. Ariely says this is because humans are  afraid of loss. From a consumer perspective, one association I have with “free” is with Amazon shipping which causes us to fall into the trap of buying something we don’t need but emotionally think we want. As consumers , I feel manipulative strategies of the  marketing will become less influential in the future. Marketing “Free” and “Sale” should digress as consumers become more aware of these deceptive tendencies. To buy in excess just because something is free or on sale is another predictably irrational behavior.

Really, anyone with even a bit of curiosity about how the human mind works or fails to work within the context of every day life  finds a lot of fascinating material in this book