Predictably Irrational: The Hidden Forces That Shape Our Decisions

What this book is, and who it's for

Dan Ariely's 2008 book is the most-read introduction to behavioral economics and is built around his Duke University lab's experiments documenting the specific ways human decision-making departs from the rational-agent model of classical economics. The departures are not random; they are predictable and consistent across populations. Anchoring effects, the disproportionate power of free, the destructive consequences of mixing market norms and social norms, the unreliability of cold-state planning for hot-state decisions, ownership-based valuation distortions, optionality bias, expectation-shaped experience, price-shaped placebo effects, small-stakes dishonesty and its sensitivity to environmental cues — each chapter documents a specific bias and the experimental evidence underlying it. The book's deeper argument is that the predictability of these biases means decisions and institutions can be engineered around them rather than relying on willpower or rational analysis. Read this when you've noticed that the standard economics models do not actually describe how you make decisions, or when you're designing systems (products, organizations, choice architectures) and want to anticipate how users will actually behave rather than how the model says they should.