sarp centel

Predictably Irrational is a book about human behavior and our decision making process from a behavioral economics perspective. Each chapter describes a force that affects our decision making process, such as social norms, emotions, relativity etc. The author presents a different perspective compared to standard economics, where we assume that all agents are rational.

• We make our decisions by comparing each option with another, and end up choosing the relatively best option. Companies use this fact to manipulate our decision making process by putting decoy options. We also anchor ourselves to initial prices.
• We have an irrational compulsion to keep doors open.
• Free is irresistable, when choosing among two products, we overreact to the free one. You can offer a great product for a very cheap price, but people would still prefer the inferior product that is free.
• Social norms make people do things for free that they wouldn’t do otherwise for a small amount of money. Open-source software is a great example.

• On procrastination: He lets students choose their own deadlines for assignments, and compares results with where the professor sets deadlines
• On ownership: Students at Duke go through a very difficult process to obtain football tickets. Those who win the tickets value them at $2,000 to sell them, whereas losers offer $150 for the same experience
• On social norms: They experiment with giving parents fines for picking up their children late, but it doesn’t work as well as guilt does
• On relativity: Same circle looks larger when it’s surrounded by smaller circles
• On cost of zero cost: People prefer $10 coupon for free rather than taking a $20 coupon for $7

Admitting the problem is the first step to a solution. I’ve been exercising on and off for 6 years and given the amount of time and effort I’ve put into it, I’m very far away from the body I deserve. I’ve come up with several conclusions:

i) You can not improve what you don’t measure
For years, I kept going to our local gym where they provided you with all the equipment, but didn’t really measure your progress or keep an eye on you. I kept exercising, without considering if I was improving or not. I was guilt free, thinking that I’m taking action to improve, but I was missing an important piece: diet. I was eating relentlessly, taking more calories than needed, eating desserts and drinking alcohol.

My new gym measures my weight and body fat every 6 weeks. After the first measurement, my body fat was the same, and I had lost some muscle mass. It was a disaster and I was very disappointed. I realized that going to the gym is only 30-40% of losing weight. Your diet, on the other hand, is what is most important.

ii) Working hard is deceiving
I’ve worked hard, but I haven’t worked smart. Working hard is deceiving, it prevents you from achieving your true potential. Little progress you make due to working hard conceals all the mistakes you are making. Don’t fall into this trap!

iii) Exercising is counter-intuitive
To burn fat, you don’t need to run as fast you can. Instead, you should run slowly for a longer period of time, maintaining a certain heart rate. To build muscle mass, you shouldn’t go to gym everyday. Instead, your muscles grow as you rest, so you should exercise every other day. And if you’d like to have 6-packs, doing thousands of crunches won’t help you much if you have a lot of body fat. Those aren’t done in the gym, it’s all about your diet and body fat percentage.