Book Discussion MAGEN – Athifah Aziz; Predictably Irrational by Dan Ariely

Rabu, 28 Disember 2013
Mudarrag 1, Bangunan Anatomy, Kasr el-Ainy Faculty of Medicine, Cairo University.

MAGEN 3^rd Book Discussion featuring a book titled ‘Predictably Irrational’ written by Dan Ariely. A book under the genre of behavorial economics/psychology. This book is discussed by Athifah Aziz.  

The books tells us how or what are the factors that influences us in making day-to-day decisions.  The author conducted numerous studies on human behavior, noticed the irrationality and how they are repeated with each group studies, thus the title ‘Predictably Irrational’.  It is more to split second decision, to study our inner force that drives us in making these choices. 

Dan Ariely, the author, is currently a James B. Duke Professor of the Duke University.  At 18 years of age, his accident had caused him to suffer 3^rd degree burn injury to his whole body. His stay in hospital and the daily painful treatment had him thinking on human behavior and reasoning.  During his studies in University Tel Aviv his professors encouraged him to think, inquire, question and conduct his own research, regardless it fail or succeed. 

Chapter 1 of this book talks about ‘Relativity’.

We do not have internal value meter for how much things are worth. In reality, we face relative advantage of one thing over another. For example, we don’t know what kind of racing bikes we want until we see a champ in Tour de France using a particular model.

Put an item on the menu at a high price and the second expensive will be the selling item. The salesman putting the price of the TV model he wants to sell in the middle range.

If given 3 choices, we tend to focus on what is easily comparable.

The more we have the more we want. The only way to stop this is to break the cycle.

It may lead to miserable life as we become envious of what other people have, constantly comparing our life to theirs.

Travelling and relativity – We get along with someone from the same background at an unfamiliar places, but when we got home the bond become somewhat less exciting than before.

Chapter 5 on the other hand, talks about the const of zero cost.

The urge to jump to free item even if we don’t really want them might be because, in transaction, we can see the upside and downside, but we forget the downside in FREE.

We perceive what is offered is more valuable than it really is. We are intrinsically afraid of loss.

In chapter 6, the author draws out comparison in the effects of market norm vs social norm.

Social : Friendly request, social nature, need for community.

Market: sharp-edge, self-reliant, individualism, comparable benefits and prompt payment.  You get what you’re paid for.

Gift is related to social norm.  However, priced gift is equal to cash thus changing it into a market norm. When social norm collide with market norm, social norm will go away for a long time and will not be easy to reestablish

The job that put life at risk such as police officer and soldier doesn’t pay as much as it worth but by instilling a strong sense of social responsibility, they are able to carry out their job with more pride and sincerity.

The social norm will also make people less selfish and start caring the welfare of others. 

Before concluding, in the last two chapters on this book Dan conducted a study that shows the tendency of people to cheat in test decrease when they’re told to recall the 10 Commandments.  From here we can conclude that faith and religion plays a role in our decision making, when we are aware of it, thus the importance of constant reminder in our daily life.