The Honest Truth About Dishonesty (2012), Predictably Irrational (2008), The Upside of Irrationality (2010) | Dan Ariely

The Honest Truth About Dishonesty (2012)

This was the first book I read that was written by Dan Ariely, which was around 2 years ago. Since I’ve had some time away from it, the one that remains salient is that people don’t evaluate dishonesty on a rational model of weighing the cost versus the benefit of an act, comparing positive and negative outcomes. The much more related model is that which is related to a person’s view of him/herself. People will fudge results only to the extent that they do not feel bad about themselves.

On the last chapter of the book, a seesaw is illustrated. On the left side, the label is “Increase Dishonesty”. On the middle where the fulcrum stands: “No Effect”. To the right side: “Decrease Dishonesty”

Factor’s that affected increasing dishonesty we’re listed as (1) ability to rationalize, (2) conflicts of interest, (3) creativity, (4) one immoral act, (5) being depleted,(6) others benefiting from our dishonesty, (7) watching others behave dishonestly and (10) a culture that gives examples of dishonesty.

Factors that had no effect: the amount of money to be gained and the probability of being caught. This was surprising.

Factor’s that decreased dishonesty: (1) pledge, (2) signatures, (3) moral reminders, and (4) supervision.

Predictably Irrational (2008)

Realizing this was Dan Ariely’s first book, it doesn’t have the same structure as his later works. This book nevertheless described forces that influence our behaviors, whether we are aware of them or not.

  • Relativity – People compare things in relation to others and People have a tendency to compare things that are easily comparable. One such that exploits this is the Decoy Effect.
  • Fallacy of Supply and Demand – Supply and Demand is dependent on seller’s retail prices and consumer’s willingness to pay, and that they can be easily manipulated based on anchoring.
  • Cost of Zero Cost – People have a tendency to react favourably to the words “free” and “zero” even at the cost of disadvantages.
  • Cost of Social Norms – There is a difference between Market Norms and Social Norms. And it is best not to overlap the two. A market norm requires an exchange of payment; a social norm does not require an instant payback, a favour.
  • Influence of Arousal – High Emotion situations have the potential to trigger actions a person would not normally consider.
  •  Procrastination and Self-Control – In a cool state, we make rational long term decisions, conversely on hot states; we make actions that satiate immediate gratification. People have a tendency to put off long term goals and procrastinate. Therefore we should try counter this by planning ahead for hot states: applying deadlines, penalties and/or automate a couple actions.
  • High Price of Ownership – We have a tendency to overvalue things we own.
  • Sometimes having too many options can be paralyzing and have a negative effect.
  • Expectations have an effect to how we experience things.
  • Power of Price – Similar to the placebo effect, the price of an item tricks us into thinking that it has more value/effectivity compared to the same item with a lower price.
  • Cycle of distrust – Trust is like a public good. People are willing to forgive a bit of lying, but persistent ones only increase levels of distrust, and that once trust is eroded it is hard to restore.
  • Context of Characters – Given the chance, many honest people will cheat, but not wildly dishonest. People want to be honest, but only in terms of big offenses, if it seems small, people do not contemplate of their honesty.

On the last chapter of the book Dan Ariely writes:

"We are all far less rational in our decision making than standard economic theory assumes. Our irrational behaviors are neither random nor senseless--they are systematic and predictable.  So wouldn't economics make a lot more sense if it were based on how people actually behave?  That simple idea is the basis of behavioral economics."

The Upside of Irrationality (2010)

As a follow up to Predictably Irrational, some of the ideas and experiments have somewhat of an overlap. In this book, however it’s lighter and has a more positive tone. The book is split into the unexpected benefits of irrationality at Work and at Home.

At Work:
  1. Big bonuses only work for mechanical tasks. For tasks that require creativity, bonus can have the opposite desired effect.
  2. People find less meaning in work if they find that their work is ignored or deleted in front of them. People find meaning in work if it is acknowledged and they know to what it contributes to.
  3. We value things we create more than those that we didn’t. This is the IKEA effect. We value things more when we exert more effort into, but only if we get to complete it. It is often effort that creates long-term satisfaction.
  4. Not Invented Here bias: If I (we) didn’t invent it, then it’s not worth much. This is similar to IKEA effect, except with ideas. Make people own the idea and they will value it more.
  5. Although people have a high tendency for revenge; this can easily be managed with an apology.

At Home:
  1. It is no longer a debate that because of Adaptation, we adapt to events good or bad. It might seem logical to break boring experiences into small blocks and pleasurable experiences into one whole part. However, due to adaptation it is much wiser to go through irritating/boring experiences in one go; and to take a break from pleasurable experiences to get more satisfaction out of it.
  2. People reorient on what they look for in terms of dating, more into values than attractiveness.
  3. There are limits to online dating. The difference between online dating and offline dating is that people react to their experience. It is a much better gauge for compatibility to do things you enjoy with other people and see how they react.
  4. When we’re led to care about individuals we take action, but when many people are involved we don’t. Being rational and calculating does not increase our concern for large problems, it supresses our compassion.
  5. Emotions have a carry-over effect to long term decisions


Again as a final note, Ariely writes that we have a lot of irrational tendencies and oftentimes we are not aware of these tendencies. He invites that we question these irrationalities, our intuition, our gut, and to test them if they stand up to the tasks.

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