Book review: Predictably Irrational

This book by behavioral economist Dan Airely, is a brilliant read for anyone who is interested in attempting to predict human behavior. From a marketing perspective, it’s a great study in pricing, packaging and just general human motivators. For years, behavioral economists have suggested that people behave rationally. Airely turns this on its head by suggesting that not only are we humans irrational, we are actually PREDICTABLY irrational. A dichotomy for sure.

Airely talks about all relationships being defined as social exchanges or market exchanges. He gives concrete, real-life examples of decoy and anchor pricing, and how many times in life we as consumers, “overpay, underestimate and procrastinate” based on systemic decisions. For me, it was like a light bulb going off. I consider myself a pretty savvy consumer but after reading this book, I realize how many times I, too, am guilty of this irrational sin. I now look at menus differently and chuckle to myself when I see prices positioned a certain way. At least weekly, I refer to Airely’s teachings in my personal and professional life.

Key Takeaway: Humans don’t understand the value of something until they see it in context to something else. And we behave irrationally consistently as consumers.

Here’s a list of upcoming book reviews:
The Creative Destruction of Medicine
Deep Medicine
Blink
Outliers
212 Degrees