Book Spotlight: Predictably Irrational by Dan Ariely

Books
Written By Chris P

I don’t think I need to say much more than what’s already been said about Predictably Irrational. During my MBA at UC Davis, I took two courses that pulled me deep into the world of Behavioral Economics — Game Theory and Markets & Firms.

Quick shoutout to my professor, Victor Stango. He had a way of breaking down complex econ theory in a way that was both clear and genuinely entertaining. Toward the end of our Game Theory course, I asked him if he could recommend a few books to dive deeper into Behavioral Econ. Without hesitation, he said: Predictably Irrational.

Went to Amazon. Bought the book. Received it. Read it. Enjoyed the hell out of it.

Key Concepts

  1. The Truth About Relativity
    We don’t know what we want until we see it in context — we compare things, not value them independently. (Example: the power of “decoy” pricing in marketing.)

  2. The Cost of Zero Cost
    Free isn’t just a price — it’s an emotional trigger. People will irrationally choose worse outcomes just because they involve “free” items.

  3. The Cost of Social Norms
    When people are motivated by social norms (like helping friends), they behave differently than when money is involved. Mixing the two can backfire.

  4. The Problem of Self-Control
    People overestimate their ability to resist temptation or make rational choices in the future (think diets, procrastination, or impulse buying).

  5. The Power of Expectations
    What we expect influences what we experience. For example, if we expect a wine to taste expensive, we will perceive it as better.

  6. The Influence of Ownership
    We overvalue what we own (the “endowment effect”) — even if it's no better than other options.

Affiliate Link: https://amzn.to/44k8WYE

I also have a video regarding this book coming soon!

Chris P