The Upside of Irrationality

A successful publication calls for a follow-up. The Upside of Irrationality is the successor to Dan Ariely’s successful Predictably Irrational, one of the best selling popular behavioral economics books of the last few years.

Despite its title, the book is not a thorough exploration of instances where irrationality leads to better decisions: As in his previous book, Dan reports here mainly on his own academic research relying on laboratory and field experiments covering topics ranging from the adverse performance effects of high powered financial incentives to the impact of empathy and emotions on decisions. More than before he interweaves his narrative with personal anecdotes that illuminate his choice of research topics; he reveals how his experience of being a burn patient in his youth shaped his future career and how normal day-to-day annoyances and more pleasant experiences led him to devise testable hypotheses about human behavior. This is perhaps also the most surprising aspect of the book. Dan’s highly personal way of sharing his thoughts and knowledge is also highly unique. This is not a dumbed-down version of academic research for the masses to make a quick buck [in case it is intended as such a thing it’s execution is brilliant]; this is something very personal. It is not only for the reader, rather, it seems to be also something important for the writer, a way of coping maybe. (And indeed, Dan does not only share his pain, he also reveals his darker side for revenge.)

I have a few quibbles. Only a few and very minor ones.

The Upside of Irrationality is divided into two parts. The first part is supposed to relate to the work domain, the second part to the non-work domain. Yet, the first part contains a chapter on revenge that would have fitted much better to the material on emotions that Dan discusses in the end of the second part.

All but one chapter are primarily based on Dan’s own research. On the topic of empathy, he did not even have an article of his own to include in the additional readings list. Though, of course, the topic may be very dear to him, this somehow interferes with the otherwise very personal exposition.

In the chapter on revenge, he mentions that he would not want people to live by the biblical rule “an eye for an eye”. Why not? This is a rule of moderated response. If you do not punish those who hurt you, you may invite further harm. This, Dan himself discusses in this chapter. If you punish in moderation, that is “not more than one eye for an eye”, you avert inefficient escalation. So, why not?

The title of the book and the subtitles of chapters promise more than Dan finally delivers. Where are the benefits, you wonder. Why do we do that? Dan demonstrates very compellingly behavior that is inconsistent with utility maximization and identifies behavioral quirks that lead to counter-intuitive recommendation for improving our overall happiness. He does not really explain why we do what we do. He does not really show benefits of irrationality. OK, the last is not entirely true. Our irrationality makes us human, he reveals at last.

In spite of the above, a great book. I would not dare to say that it is better or worse than Predictably Irrational. It is different.

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