The Upside of Irrationality by Dan Ariely

The book contains insights, analyses, and experiments by a social scientist who has observed human behavior and commented on how rationality plays a part in everyday life. I perceive myself as a rational person, but like many others, I am subject to irrational behaviors. I am in agreement with the majority of the points Ariely presents and I would recommend this book for someone wants to engage with and think about the written material. I enjoyed how some of his chapters are based on simple observations, such as one’s attachment to self-made objects, while others tackle personal matters, such as procrastination. I would recommend this book to be read slowly, as I spent considerable time contemplating how each chapter affected my perspective.

Ariely brings up many observations on how humans are irrational, even when it may serve them better to be rational. He brings up several great points on irrational behavior that shines a light on how people can be stuck in irrationality without realizing it. I share Ariely’s belief that the bonus system is archaic and inefficient; a livable wage should be enough motivation for people to perform at their highest level. Ariely’s experiments supported the idea of moderate compensation being the best form of motivation. Similar to Mazlow’s hierarchy, alternative compensation that links to self-actualization tends to be a better motivational tool than simply money.

Gravity Payments made headlines when Dan Price, their CEO, announced that he was raising the company’s minimum salary from $40 000 to $70 000. Price’s sentiment was benevolent and he took almost a million dollar pay cut to achieve this change; however, the results were less than desired. By raising only the minimum wage at an attempt to achieve pay equity, Gravity employees who eanred above the $70 000 mark found their wages to be less rewarding. Why? In comparison to the job market, they were still making an above average wage. Yet, in comparison to their peers, their status was diminished and they felt marginalized. Disgruntled employees felt that they earned their wage through hard work and development, while it was being handed to others. To augment the issue, the company fell on hard times and had spent 2.2 million dollars to pay employees instead of reinvesting or growing the company. I tried to take this situation under Ariely’s perspective and I believe he would have pointed out the irrationality of the disgruntled employees. Their enjoyment and satisfaction are linked to the status they gain through a perceived higher wage, which is irrational. For Price, raising the minimum wage for his company would be an attempt at achieving optimal motivation, where his employees would not need to worry about their financial needs. If all parties were rational, this arrangement would have been a huge success.

Another chapter I remember vividly was centered on adaption, where Ariely states that humans have an incredible ability to adapt to new situations after dramatic changes, such as losing a limb. The initial change will cause sadness, but the average level of happiness in the long term will not be affects. I found this chapter to be the least relatable and I disagreed with some of the generalizations that Ariely mentioned. I believe resilience to be a special trait in survivors and the ability to adapt to a new reality to be strength. In many cases, individuals are unable to adapt and achieve the same level of happiness found before an accident.  Survivors are aptly named for their tenacity in surpassing the challenges of their situations. On the other hand, his opinion on hedonistic purchases (purchases that are meant for pleasure like new clothes, or a car) is incredibly accurate. The short-term pleasure one gains from making a material purchase will degrade with time, which is why experiential spending, such as in travel, is so rewarding.

There is so much more to say about this book, and this post is getting long so I will cut it off here. Give this book the time it deserves and read it thoroughly.

Rating: 10/10
For the thinker in you.


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