07 June 2009

Predictably Irrational, the abridged version

I previously raved about Dan Ariely's Predictably Irrational. So I also eagerly watched the two TED talks he has given, which cover a lot of the same ideas presented in his book, but with a couple of novel anecdotes. They are kind of like the Readers Digest version of Predictably Irrational, and I recommend them if you can spare 35 minutes:

Now, in any introductory psychology or economics class you learn a lot about cognitive failings, or apparent deviations from rationality. I think that what makes Dan Ariely's books and talks so valuable is that in addition to pointing out our flaws, he gives advice on how we can work around them in order to make life better for people. I think the conclusions from these two TED talks are, in particular, quite important:

  • We can create more effective institutions if we design them so that they take into account our cognitive limitations, rather than designing them under the assumption that we (the users) are beings of perfect rationality.
  • We could find many better ways of doing things if only we were willing to test our intuitions with experiments.

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