The Enlightenment assumption that humans are rational thinkers is something that many generations have grown up with; this idea infects our politics and our economic theories, yet it is laughably false. We cling to it because it is comforting and because we are unable to easily witness our own irrational behavior; it is either glossed over or explained away after the fact. In a world where financiers and academics uselessly fantasize about the behavior of homo economicus, that rational self-interested actor of game-theory fantasy, the less deluded among us should be learning everything we can about the reality-based science of behavioral economics, and Dan Ariely’s ‘Predictably Irrational’ is an excellent introduction to the field.
This study is especially necessary for Eve players, simply because Eve is one of the last bastions of the capitalistic mathematics-obsessed spreadsheet nerd. These people are everywhere in New Eden, and their ability to predict human behavior is hamstrung by their belief in rationality, the kind of apologia you might find in ‘Freakonomics’. Those of us not so unencumbered have a competitive advantage against rationalists, simply from understanding the concepts of anchoring, loss aversion, and an enhanced ability to compensate for our known irrationality.
One of the most alarming revelations in the book relates to how humans can be influenced by communications and media even when they actively attempt to avoid being persuaded; even if you vehemently believe that hisec is too safe, reading the whines of carebears on Eve-O will gradually sway you to their side, unless you also encounter opposing views.
This book exploded when it was first released in 2008, at the vanguard in a host of similar tomes, such as Sunstein and Thaler’s more political ‘Nudge’. Ariely himself is a gifted writer and the star of three TED talks, all of which are worth watching. ‘Predictably Irrational’ is not a business-focused how-to book like ‘Influence’, but rather a tour of the various repeated foibles of our cognition, an attempt to gradually break down our unfounded cultural assumptions of rationality with a tide of humbling evidence. I’d like to think that by now almost everyone has read this book, but if you haven’t, it’s time to catch up.