NONFICTION: The persistent sleep of human reasoning

NONFICTION

Imagine you have two tasks to perform: buy a new pen and buy a new suit.

You find the perfect pen for $25, but you decide to drive an extra 15 minutes to buy it for $18 at another store. Then you find a nice suit for $455, and though you know you could buy the suit for $7 less from a store that’s 15 minutes away, you readily buy it at the higher price. Why?

On its face, your decision-making seems to be irrational.

%26quot;The only question you should ask yourself in these cases is whether the trip across town, and the 15 extra minutes it would take, is worth the extra $7 you would save,%26quot; Dan Ariely writes in %26quot;Predictably Irrational: The Hidden Forces That Shape Our Decisions.%26quot; %26quot;Whether the amount from which this $7 will be saved is $10 or $10,000 should be irrelevant.%26quot;

Even a robot could figure it out, right?

Therein lies the problem, says Ariely, a professor of behavioral economics at the Massachusetts Institute of Technology.

We all like to believe we’re resoundingly rational, especially during financially serious moments such as buying a house or a car. Ariely demonstrates that this is rarely the case.

Consider an experiment Ariely conducted on MIT students. He showed that the students’ writing down the last two digits of their Social Security numbers influenced their bidding on a variety of objects. The higher the number they wrote, the higher they were willing to bid.

Ariely’s ingenious experiments make for fascinating reading, but they’re also a little depressing, especially if you pride yourself on being smarter than a toddler on a sugar high.

Here’s the good news: Ariely suggests that our predictably irrational patterns of decision-making can be broken.

Some of his advice isn’t as eye-catching as his experiments: Be wary of %26quot;free%26quot; marketing gimmicks; set strict deadlines to avoid procrastination; settle arguments by revealing the facts, but not each side’s affiliations.

But Ariely’s suggestion for fighting credit-card debt with a %26quot;self-control%26quot; credit card is original and intriguing. It certainly caught the attention of the bank to which he pitched the idea, although the bank ultimately didn’t act on it.

%26quot;It might have been that they were worried about losing the $17 billion in interest charges, or maybe it was just good old procrastination,%26quot; Ariely writes.

Still, for most of us, %26quot;Predictably Irrational%26quot; is worth a close reading. After all, think of how slim and wealthy you would be if you’d stuck to that diet and skipped those daily Starbucks indulgences.