Predictably Irrational, by Dan Ariely (Hardcover, 2008)|
(You can print this review in landscape mode, if you want a hardcopy)
Mark Lamendola, author of over 6,000 articles.
This book helps explain some things that marketers need to know. I've never understood why anyone would be enticed by an offer of "free shipping," as there is no such thing. Those pesky UPS drivers just insist on being paid for spending all day delivering packages.
The book provides insights, most of which are based on simple experiments. Each experiment had a control group and was conducted under what appears to be a modicum of rigor. But the experiments may as well have not been conducted. The reason is the test subjects were people under the age of 25 and the testing was for the characteristic of rationality. The subjects are not, therefore, suitable to what they were being tested for.
You can't rent a car if you are under 25. Do you know why? Because humans do not fully develop their judgment centers until that age. The human brain takes a long time to mature, and 25 is the rationality barrier. Thus, the experiments were on subjects who, due to their physical immaturity, are irrational. Testing people in this age group for irrationality is like testing window panes to see if they are transparent.
The experiments are therefore invalid.
That Ariely would even use these experiments in this text is a negative. But he compounds his error by extrapolating the results onto people who have crossed the rationality barrier. This barrier is a physical thing, and there's no getting around that. Quite simply, his test subjects have very different brains from the people upon whom he extrapolates the test results.
That's clearly a foul.
Thus, we have to accept Ariely's conclusions without the support of his experiments. In fact we have to accept them in spite of his experiments.
Fortunately, he draws on other examples and he presents logical arguments. Generally, I agree with his conclusions--or, rather, his conclusions tend to agree with how I already view things. That doesn't mean his conclusions are correct, and he provides precious little to back them up.
Given what I just said, the book has value. The value lies in the questions the author raises and discusses. Ariely takes an open-minded approach and pursues each topic in a style that is engaging, conversational, curious, and mildly entertaining.
I enjoyed reading the book. I liked thinking on the questions Ariely raised. I liked thinking about his answers to those questions, and I liked the fact his answers were often "food for thought" rather than trying to take on a false tone of "absolute truth." He raises some serious social questions, yet doesn't abuse the book as a chance to preach a particular political agenda. He does correctly hint at the irrationality of some failed public policies, such as the disastrously expensive and totally ineffective Sarbanes-Oxley Act, but not in a way that posits that either wing of the Demopublican Party is better than the other.
This is the kind of book that can provide a starting point for people who like to talk about things other than the normal trivia that, irrationally enough, passes for conversation. For example, it would be interesting to take off from his ideas on the "self control" credit card to discuss the actual underlying problem of weak personal discipline. Why is that problem there? What can you do about it? Why do even well-disciplined people have bouts of ill-disciplined behavior? Ariely provides a dozen or so such topics that can make for serious social conversation among friends.
This book consists of 13 chapters and 244 pages of text. It has a long introduction, a short set of backnotes, a fairly robust bibliography, and a decent index.
Chapter 1, The Truth about Relativity, is the most important chapter for marketers. It talks about how people are swayed by one price relative to another.
Chapter 2, The Fallacy of Supply and Demand, talks about how price anchors affect market prices much more than supply v. demand does.
Chapter 3, The Cost of Zero Cost, explores the brain-deadening allure of "free" and provides many examples of how people will spend more to get something for free.
You'll find similarly intriguing topics in the next 10 chapters. Any one of these topics could be expanded to the size of the entire book. But that would make for reading that is just too heavy for most people. This book isn't hard science. It's popular reading. But it's popular reading with some oomph to it. Read the book, ignoring the irrelevant research, and you'll probably find yourself enriched.