Loved this. Dan Ariely is a behavioural economist - which basically means…well, I’m not quite sure what it means [find out here ]. But, for the purposes of this book, it means he gets to look at why people consistently do things which are apparently irrational or inconsistent or both.

Like - why some people are more motivated when they’re not being paid for something (it’s all about market norms and social norms you see), or why we’re prepared to pay so much for a coffee (it’s about anchors), or whether men say one thing, but then do something else when sexually aroused (no shit, Sherlock!).

So - this neatly slips between Freakonomics (which I didn’t think was that great) and Tim Harford’s ‘The Undercover Economist’ (which had me wishing I’d done Economics A level - and yes, while I’m in this vein, I’m just about to start The Logic of Life - which I suspect will have a fair amount of crossover).

Anyway - my favourite bits.

• His description of social norms and market norms. This explains why it’s generally not a great idea at the end of Christmas dinner to say to your mother in law who cooked. ‘That was delicious..how much do we owe you, will £50 be ok..?’ (because she is working under social norms); while it’s similarly not a great idea to waltz out of a restaurant giving the owner a kiss and saying you had a lovely time but not paying (because s/he is operating under market norms). I simplify this hugely - but it’s obvious that some of the great culture clashes on the web are actually the collision of social and market norms.

• He is great on pricing. Full stop. The first couple of chapters on comparability and the ‘fallacy of supply and demand’ should be read by anyone who has to cook up a price point for anything.

• He also points out the compelling attraction of ‘free’ - and that zero is not just another price point (yes, lots more where that came from).

• He gives the example of students at Duke university getting hold of ultra rare basketball tickets, and then creating a market for them. The owners think they should sell at $3000. The buyers think they’re worth about $170 - and under the banner of the ‘high price of ownership’ - basically we overvalue our stuff (as anyone who has set up stall at a car boot sale will realise).

Anyway - I suspect proper economists might deem this sort of thing too pop to be meaningful, but I found a few of the insights both new and profound. Thoroughly recommend it. Buy it here.

Also - a full interview in NewsWeek.

I’m a terrible book reviewer. So this isn’t a review. It’s just a bullet point burst through what’s in my mind having just put the book down having galloped through it over the last 24 hours.
So - my plus ponts

• He’s terrifically readable, and very quotable. I found myself making marks in the margins of all the bits that I’m planning to drop into presentations etc. That doesn’t happen that often these days.

• We’ve had most of the examples before: Wikipedia, Flickr, Twitter, Trent Lott, Flashmobs et al (more on this later), but he weaves all of this together with a pretty compelling narrative grounded in reasonably accessible economic and sociological theory.
• He’s obviously a great believer in the world he describes - but he’s not blind to its shortcomings - eg open source software projects that fail, the ‘poor quality’ or some blogs etc. In fact, rather than paper over these issues, he explains how they’re an integral part of the phenomena.
• The chapters most relevant to media/ journalism - ‘Everyone is a media outlet/ and ‘Publish first, filter later’ should be required reading for pretty much everyone currently sitting in a newspaper/ broadcaster. It’s certainly the best thought through thing I’ve read on this, and the comparison to the decline of the scribes when the printing press came in is really well draw.

• My big, big take away (but by no means the biggest point in the book) - is how some of the most remarkable phenomena of this era - Linux, Wikipedia, Blogger and (although he doesn’t make the direct point) Craigslist have started with remarkably small ambition. Not big ideas. Not vision. Just a ‘I thought I might…’

• Good for him for playing down the importance of his original essay on power laws at work in blogging, which kicked off so much thinking.

And my not-so-plus points

• Like lots of these books, by the end you feel it’s flagging and repeating itself just to make it to the required 300 pages. It’s not like a Seth Godin book - where you can get all the good stuff just from the intro and the rest is exposition that you can take, leave or just dip in and out of; it’s worth persevering with - but it could have been 50 pages shorter and no worse.
• This rehashing of the same examples is starting to grate a bit. Linux, Wikipedia etc - we’ve been chewing over this stuff for a while, we need fresh meat!!!
• * I think at times he’s a little too forgiving of Wikipedia - in particular the way that a single credible but erroneous fact can make it into there, be overlooked and then be replicated. Once it’s discovered, then the whole credibility of Wikipedia as a serious research tool starts to be undermined. My personal hunch is that we still don’t know whether Wikipedia is going to make it from being a phenomena of our times to a widely trusted resource.

Some of my favourite quotes

I like this

Now that there is competition to traditional institutional forms for getting things done, those institutions will continue to exist, but their purchase on modern life will weaken as novel alternatives for group action arise.

And in a similar vein, on the way some professions face threats..

Sometimes those threats are also threats to society; we do not want to see a relaxing of standards for a surgeon or a pilot. But, in some cases, the change that threatens the profession benefits society, as did the spread of the printing press; even in these situations the professionals can be relied on to care more about self devense than about progress. What was once a service becomes a bottleneck.

Anyway - I could go on, but you really should get hold of a copy.

Buy it at Amazon. Read the blog. Watch the video.