Saturday, October 4, 2008

Predictably Irrational

Predictably Irrational (Dan Ariely, 2008) details common human foibles as seen through the lens of behavioral economics. It turns out we're not the rational actors classical economics as established by Adam Smith says we ought to be. We make poor decisions based on emotion, we procrastinate, we choose short-term comfort over long-term security, etc. We believe stereotypes--even about ourselves. One of the most disturbing studies Ariely cites, in my opinion, is the one where two groups of Asian-American women, college students, were each given a math test. Before the test, one group answered a questionnaire about their experiences as women, while the other answered one about their cultural background. A case of competing stereotypes, you see? Women are supposed to be bad at math, while Asians are supposed to be good at it. Sure enough, the women who had been reminded of their gender scored lower than the ones who'd been reminded of their ethnicity.

Definitely recommended for anyone who's interested in popular science or economics, and guaranteed to make you think more deeply about why you make the choices you do.

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