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Saturday, July 31, 2010

Review: The Upside of Irrationality

The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home is Dan Ariely's sequel to Predictably Irrational. While the book is subtitled "The Upside of Irrationality", the reality is, there's not actually a lot of upside to being irrational, but Ariely's found a ton of workarounds.

For instance, in the chapter on online dating, he discovers that online dating sites are a horrible way to meet people. You effectively have to spend 9 hours searching, writing, and corresponding with prospective dates for every hour you actually get to go on an actual date. He found a workaround, though, in that if you gave people an online place to chat and gave them something to chat about (even something as abstract as shapes would do), they'd have a lot more fun and be more eager to meet in person. This example is also an illustration of where Ariely's limited business experience comes into play. He never asks, "If that's the way to do it, how come nobody has done it?" It turns out that the online dating business has a conflict of interest with respect to its customers. If they're too successful, their customers leave. If their customers don't feel like there's another prospect over the horizon, they'll leave too. As a result, all the emphasis on those sites is on customer acquisition and retention, not really on helping you to date better, or get to a date faster. This kind of second-order effect analysis is completely absent from Ariely's book.

The section on bonuses affecting outcome is already covered in other books like Drive, and again, the lack of second order analysis there is glaring. What can we as a society do about this? There's no suggestions, because the true implications of understanding the effect of pay has political ramifications, and Ariely probably doesn't want to get into those.

I did enjoy the chapters on NIH-syndrome, on assortative mating, and why we over-value what we put time into making. Overall, the book is just as enjoyable as the first one, and a lot of fun to read. I'd recommend it for airplane reading. Just be wary that it's not very deep and would trigger more questions in an intelligent reader than the author is willing to answer.

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