Kyla Dunn reviews Dan Ariely's newest book, The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home, for the New York Times. Airely's previous book was Predictably Irrational: The Hidden Forces That Shape Our Decisions.
What We Misunderstand By KYLA DUNN
Published: May 27, 2010
Consider an experiment economists call “the ultimatum game”: The experimenter gives one player, the sender, $20 to distribute between himself and another player, the receiver. An egalitarian sender might propose a split of $10 each. A more selfish sender might propose to give the receiver only $1, keeping $19 for himself. If the receiver accepts the deal, the two players collect their shares. If the receiver rejects the deal, both walk away with nothing. Were humans perfectly rational, the receiver would accept whatever is offered: even a dollar is better than nothing, right? Instead, researchers find, receivers will reject an overly lopsided deal, gladly giving up their shares just to punish the stingy senders.
In The Upside of Irrationality, Dan Ariely, a professor at Duke, gives us a tour of the irrational side of human decision-making and the science of behavioral economics. When it comes to our motivations, he writes, we are less like “hyper-rational Mr. Spock” and more like the “fallible, myopic, vindictive, emotional, biased Homer Simpson.” Given these frailties, Ariely wants to help us “figure out how we can get the most good and least bad out of ourselves” when making choices about our money, our relationships and our happiness.
As in his previous book, the best-selling Predictably Irrational, the experiments Ariely describes generate entertaining and often counterintuitive insights. We learn, for example, why it’s better not to reward yourself with breaks from the grind of doing your taxes — and why it is a good idea to leave the hot tub to stand shivering for a bit before jumping back in. (Interruptions, studies have shown, prevent us from adapting to an experience, thereby heightening pleasure but also exacerbating pain.) Those still reeling from the audacity of Goldman Sachs will particularly enjoy the chapter on why outsize bonuses may actually reduce the quality of an executive’s performance.
The Upside of Irrationality is also about getting to know our courtly narrator, who draws from his own daily experience to generate hypotheses about human behavior (like “the Ikea effect,” which makes us overvalue things we have made ourselves, even if it’s a wobbly bookcase assembled from a kit). When a waitress botches his lunch order, or when he’s treated dismissively by Audi’s customer-service department, Ariely finds inspiration for a series of experiments about consumers’ desire for revenge and what a smart company should do about it.
The result is more than just a handbook for business managers or a collection of snippets to relay at cocktail parties. “To get real value from this book,” Ariely tells us, “consider what you might do differently, given your new understanding of human nature.” How, for instance, can we get more out of online dating than a succession of one-time, semi-frustrating meetings for coffee? The problem, Ariely writes, is that most sites reduce potential mates to a few short essays and a set of vital statistics, giving no clue what it’s actually like to spend time with a person (the real basis for our decisions about potential partners). It’s as useless an exercise as “trying to understand how a cookie will taste by reading its nutrition label.” By contrast, when Ariely and colleagues created an online “virtual dating site” where daters used instant-messaging to share an experience found on the site, like a movie clip or a piece of abstract art, this more relevant insight into potential mates doubled the likelihood of a real-world date.
At times, The Upside of Irrationality comes across as a lighter, less elegant version of “Predictably Irrational,” and Ariely sometimes indulges too extensively in the minutiae of his autobiography. But deciding how to apply his insights is a pleasure that lingers long after the book is finished. “Ask questions,” he says. “Explore. Turn over rocks.” What lies in wait is a better understanding of your own irrational mind.
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