I’ve been reading this book Predictably Irrational by Dan Ariely, who is a behavioral economist at MIT. His field is relatively new, and brings together the disciplines of behavioral psychology and economics. In general, he is critical of the assumption that traditional economists hold - that humans are essentially rational beings who work to maximize their profit (or well-being). By using a series of small experiments, he tries to show that people are, in fact, irrational, but predictably so (hence the title).

I was drawn to this book after catching a short presentation that he did over at TED, where he was talking about how we make choices based on the options we are given. OK, that sounds painfully obvious, but what he means is that, if we were given a choice between Option A and Option B, we might have to struggle a bit (assuming that the choices are about the same). But if we were given a choice between Option A, Option B, and Option B- (an inferior version of B), many of us would flock to Option B now because it has (apparently) become easier to identify a valuable choice, even though the choices are the same as when we had two options. I thought this was an interesting demonstration, in part because I’m inherently wary of surveys and most of the surveys I come across are poorly constructed. Dr. Ariely has managed to shown how it is that we can manipulate people’s opinions or make them make choices they wouldn’t have made before.

(The book goes into a lot of other stuff too, and I am obviously over-simplifying his entire argument. One interesting point has to do with the difference between market and social forces in our lives, and how we disrupt our social relationships if we introduce market forces in the wrong context (e.g. offering to pay someone to help you move). He uses this to argue that this is the reason why open-source software has flourished even though people are not getting paid to do work).

I see some relevance of this to the concerns of ethnomethodology (EM), although in EM, we wouldn’t put it in terms of “rationality” or “irrationality.” After all, ir/rationality tends to make people think of “right” and “wrong” choices. From an EM perspective, people are always trying to make sense of what they are doing, so it is, in some ways, always “rational” to them. It’s true, and Dr. Ariely has shown, that how we go about make these “rationalizations” differ according to our circumstances, but we still feel that our approach or perception or worldview is correct.

I do like the fact that these two approaches basically as two sides of the same coin. While EM looks at the empirical world, behavioral economists use experiments. Dr. Ariely started out his book saying that his field is often critiqued for not having anything to do with the “real world,” but I think the connections are there. This new discipline is a much needed response to our present world, where it seems that our world economy is constantly “surprising” traditional economists about the nature of human behavior.