The Upside of Irrationality

This is in much the same vein as Ariely’s first excellent book, Predictably Irrational, both books being collections of observations and experimental results from the fields of psychology and behavioural economics.

In the first half of this one, he concentrates on the unexpected ways we defy logic at work, starting with big bonuses and the results of a fascinating experiment he devised and ran in India which shows that paying out massive bonuses doesn’t always guarantee high levels of performance.

His chapters spotlight the Joy of Work; the IKEA effect (why we overvalue what we make); the Not-Invented-Here Bias (my ideas are better than yours); and the Case for Revenge. The second half is about how we defy logic at home, kicking off with the old story of the boiled frog as a lead-in to a chapter on adaptation and the hedonic treadmill (keeping up with the Joneses).

His reflections on pain are particularly interesting because of his personal experiences. As a young man on National Service in the Israeli Army he suffered third degree burns to 70 per cent of his body when a magnesium flare exploded next to him.

He endured a slow and painful recovery, during which he became interested in irrationality, wanting to understand the pain he was experiencing. The personal touch that permeates the book makes it very readable.

He devotes the next two chapters to mating, including the boom in Internet dating, before moving to consider why we respond more readily to one person who needs our help but less readily to a large number. For example, the individual 9/11 victims received massive donations compared to the many millions with Aids.

Attempting to draw lessons from our irrationalities, he urges us to discover what drives our behaviour, and to test everything if we can. That may sound like a recipe for doing nothing, staring into the headlights, which is probably irrational anyway. His book certainly made me stop and think.