Book Review: “The Upside of Irrationality” by Dan Ariely

This is the latest book by Dr. Dan Ariely. I enjoyed his previous book titled “Predictably Irrational.” And I like that the author used lots of experiments to prove and disprove his hypotheses. This is as scientific as you can get on social science. Though majority of the concepts have been covered before by Ariely or other authors, the ones that stood out for me are: 1) Inverse-U shape on compensation, 2) Hedonic adaptation (spread out joyful experience and get painful work done in one chunk), 3) People who are dating should be treated as “experience goods.”

The book is summarized below:

Lessons from procrastination and medical side effects:
The irrational forces help us achieve great things and live well in a social structure. The author’s ability to associate painful injection with enjoyable things (like watching video) allows him to survive through his rehabilitation period after his 3rd-degree-burn accident.

Defy logic a work:
Paying more less: Why big bonuses don’t always work
More bonus doesn’t always yield good results – inverse-U shape. Sometimes it could even yield negative result due to the distraction. Offering smaller, more-frequent bonuses might help.

The meaning of labor: what Legos can teach us about the joy of work.
Animals tend to prefer “earning” their food and spend their time – contrafreeloading. The need to complete goals run deep in human nature. Even a small amount of meaning can take us a long way. “To make a habit of two things – to help, or at least do no harm.”

The Ikea effect: why we overvalue what we make
1. The effort that we put into something changes us and the way we evaluate that object.
2. Great labor leads to greater love.
3. Over over-evaluation of the things we make runs so deep that we assume that others shared our biased perspective.
4. When we cannot complete something into which we have put great effort, we don’t feel so attached to it.

The non-invented here bias: Why “my” ideas are better than “yours”
Upside: use the understanding of ownership and pride that stems from investing time and energy in projects and ideas, you can inspire yourself and others to be more committed to and interested in the task at hand.

The case for revenge: what makes us seek justice?
The tendency to seek revenge does not depend on whether the agent or the principle suffer. At the moment we feel the desire for revenge, we don’t care who we punish. Remedy by apologize sooner and let time heal the wound. Revenge could be sweet by doing better than the people who did wrong to us.

Defy logic at home:
On adaptation: why we get used to things (but not all things and not always)
“We have only a limited amount of attention with which to observe and learn about the world around us – and adaptation is very important novelty filter that helps us focus our limited attention on things that are changing and might therefore pose either opportunities or danger.” On Hedonic adaptation – the process of getting use to place we live, our homes, our romantic partners, and etc. In the long term, we don’t end up as happy as we though we’d be when good things happen to us, and not as sad as we expect when bad things occur. It’s better to interrupt pleasurable experiences (space out purchases) but not break up annoying experiences (stick with it until you’re done, liking doing tax, house chores). Control the environment may influence our ability to adapt.

Hot or not? Adaptation, assortative mating, and the beauty market
Assortative mating is generally a good description of the way people tend to find their romantic partners. Aesthetic-challenged people may choose to lower their aesthetic ideals or change our sense of beauty.
We have the ability to discover and love the characteristics of our partner, thanks to our ability to adapt.

When a market fails: an example from on-line dating
The problem is that people are treated as searchable goods described by attributes, when they should be “experienced goods.”

On empathy and emotion: why we respond to one person who needs help but not to many
Three main reasons: 1. closeness: proximity to the victim, 2. Vividness (vs. vagueness), 3. Drop-in-the bucket effect. To overcome this effect, one approach is to use Jewish “rule,” “whoever sames a life, it is considered as if he saved an entire world.”

The long-term effects of short-term emotions: why we shouldn’t act on our negative feelings.
We humans have a very poor memory of our past emotional states. So we keep on making the same short-term decisions that can change our long term ones (emotional cascade). And irrelevant emotions can create DECISIONS. Self-herding comes from remembering the speicific actions we have taken in the past and mindlessly repeating them. Before committing to any long-term relationship you should first explore your joint behavior in environments that don’t have well-defined social protocols.

Lessons from our irrationalities: Why we need to test everything.
The upside of irrationalities: our ability to find meaning in work, fall in love with our creations and ideas, our willingness to trust others, our ability to adapt to new circumstances, our ability to care about others, and etc. Overcome our mistakes by running experiments, gathering and scrutinizing data, comparing the effect of the experimental and control conditions. “It is a common sense to take a method and try it: if it fails, admit it frankly and try another. But above all, try something.” – Franklin D. Roosevelt.