BOOK REVIEW: “The Upside Of Irrationality:The Unexpected Benefits of Defying Logic at Work and at Home” by Dan Ariely (2010)

More of the same from Dan and just as interesting. He looks at why large bonuses can make CEOs less productive, why we are willing to take revenge on others even if it costs us more and why there a difference between what we think will make us happy and what really makes us happy. You’ll also learn about the IKEA effect (if you build it yourself, it seems more valuable) and the Baby Jessica effect (why we respond to one person’s suffering but not to the suffering of many).

Some great quotes from the book:

  • Very high bonuses can create stress because they cause people to over focus on the compensation, while reducing their performance.
  • Our Experiments demonstrated four principles of human endeavor:
    • The effort that we put into something does not just change the object. It changes us and the way we evaluate that object.
    • Greater labor leads to greater love.
    • Our overvaluation of the things we make runs so deep that we assume that others share our biased perspective.
    • When we cannot complete something into which we have put greater effort, we don’t feel so attached to it.
  • Sony, for example, had a long track record of highly successful inventions – the transistor radio, the Walkman, the Trinitron tube. Sony’s CEO, Sir Howard Stringer, himself admitted that Sony engineers suffered from a damaging Not-Invented-Here bias. They missed opportunities on products such as MP3 players and flat screen TVs, while investing their efforts in developing unwanted products, such as cameras that weren’t compatible with the most popular forms of memory storage.

Dan Ariely explains the power of ownership

  • Revenge and trust are, in fact, opposite sides of the same coin.
  • Andrew Clark showed that job satisfaction among British workers was strongly correlated with changes in workers’ pay rather than the level of pay itself.
  • We commonly overvalue what we have and we consider giving it up to be a loss. Losses are psychologically painful, and, accordingly, we need a lot of extra motivation to be willing to give something up.

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See also:


Other Book Reviews

What We Misunderstand

NY Times: “Ariely wants to help us “figure out how we can get the most good and least bad out of ourselves” when making choices about our money, our relationships and our happiness.”

The Upside of Irrationality – The Unexpected Benefits of Defying Logic at Work and at Home

Ezine Articles: “My favorite chapter, because I found it so very interesting, as well as a chapter that explained certain feelings I’ve had and witnessed, was the chapter on revenge and why revenge is so important to us. It was really surprising that people would hurt themselves to get revenge.”

Review – The Upside of Irrationality

Metapsychology: “The expectation after this, given the title of the book and the promise in the introduction, is that we are going to learn that this irrationality brings unexpected benefits. For me, here is where the book doesn’t deliver.  In each chapter, Ariely describes experiments and anecdotes purported to support the hypothesis that irrationality has an interesting profitable twist.”

Related Blog Articles

Predictably Irrational Chapter 6 – The Problem Of Procrastination

Robert Nielsen Blog: “Ariely did an experiment to examine procrastination. He gave his students the choice of when to set the deadline for their three assignments, with the one condition that once they choose a date, they must stick with it or face a penalty for late submission.”


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The story of the ups and downs of Starbucks and why Howard Schultz decided to return as CEO. Steve Jobs’ favourite book. Any more questions? Wonderful essay that lays out the benefits of international trade.


A fun book that show why humans don’t always behave in a rational manner. An excellent outline of some of the fundamental issues in strategic management. The book is short and generally to the point. An excellent history of finance. Easy to read and lots of interesting examples.


Filed under Book Review, Business, Business Schools, Careers, Entrepreneurship, Management

3 responses to “BOOK REVIEW: “The Upside Of Irrationality:The Unexpected Benefits of Defying Logic at Work and at Home” by Dan Ariely (2010)

  1. Pingback: BOOK REVIEW: “Thinking, Fast and Slow” by Daniel Kahneman | GlobalEd

  2. Pingback: BOOK REVIEW: “Borderless Economics” by Robert Guest | GlobalEd

  3. Pingback: BOOK REVIEW: “Onward: How Starbucks Fought for Its Life without Losing Its Soul” by Howard Schultz & Joanne Gordon | GlobalEd

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