The End of Rational Economics (Harvard Business Review)

  • by Dan Ariely
  • Narrated by Todd Mundt
  • 0 hrs and 18 mins
  • Periodical

Publisher's Summary

Dan Ariely, a professor of Behavioral Economics at Duke University, writes about how it's time for companies to abandon the assumption that customers, employees and managers make logical decisions. This article was first published in the July 2009 issue of Harvard Business Review.


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Customer Reviews

Most Helpful

Easing the Cost of Retribution

Dan Ariely is a professor of Behavioral Economics at Duke University. Ariely's a lively writer, and "The End of Rational Economics" is a quick but informative piece from 'The Harvard Business Review' (2008).

The piece has several good ideas. The one I liked best was a discussion about angry customers who might exact revenge with a bad review, and how to defuse them. That alone was worth the download and the listen time.

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- Cynthia "Always moving. Always listening. Always learning. "After all this time?" "Always.""

Partially Convincing

I like the presentation of behavioral economics, because that is an important part of understanding how people respond to new products, employment, or other markets. However even though this essay questions the notion that people behave rationally, their examples demonstrate that people respond to incentives. For example people have a high propensity to cheat in experiments for a small amount of money when the chance of getting caught seemed slim. Is that irrational? Maybe not ethical but these findings actually support the notion that people operate in their own self interest, which is a form of rational behavior.

I was hoping for more of an evaluation the incentives people react to and why. The essay hinted at the notion that people irrationally make choices often to their detriment, but did not elaborate beyond the examples in experiments. I was hoping for more discussion about actual irrational behavior, like why people might rack up credit card debt instead of saving for retirement or how life impacting decisions are often made with little evidence of thought. Also I had a sense that the author is concluding that people in general need a lot more supervision, but, especially in light of the reference to the 2008 Financial Crisis, this begs the question: how do we know that the supervision will be any more rational?
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- Sam Woodbury

Book Details

  • Release Date: 07-10-2009
  • Publisher: Harvard Business School Publishing