Why would we be offended if someone offered to pay us after we invited them to Thanksgiving dinner? What is the cost of zero, and why is it far more expensive than $0.01? Do we really need to tell our waiter our order in secret if we really want to feel that it is okay for us to have our first choice from the menu?

Subtitled; “The Hidden Forces that shape our Decisions,” Dr. Ariely’s superb book has the potential to change dramatically how we think about business and our personal lives.

With the use of subtle yet easily understood experimental data, Dr. Ariely exposes humans as often acting against our own interests due to societal or market norms and that we just do not understand our own personalities and the role that emotion plays in shaping decision making – spoiler its usually for the worse.

So why would we feel offended if someone offered to pay for Thanksgiving dinner? Dr. Ariely not only explains but also shows with examples and experiment data that we humans have social exchanges and market exchanges of behavior. Social exchanges we use with friends and family. They are the norms that govern daily life and allow us to bond with other humans. Market exchanges are, as they sound, the exchange of money for goods and services and also the money we receive in exchange for our labor in the form of our working lives. When one offers to pay for Thanksgiving dinner were mixing social norms with market norms. We are indicating that we are rejecting the social acceptance of those who may be friends or family in favor of an exchange that we could expect to have with a stranger. A commercial transaction. What becomes interesting in breaking these social norms is that we find it is difficult to go back. Trying to pay for Thanksgiving dinner may never get us invited back because a social exchange has been turned into a market exchange. Employers who do not have social exchanges with their employees may find that employees therefore treat the relationship as a purely market exchange and leave for an employer who offers a better market exchange – usually more money or better benefits.  This also explains why employers who do embrace a social exchange in their workplace culture become frustrated and angry when an employee uses only market norms in their decision-making process to leave.

Likewise, when companies use a social exchange to bond with clients they may find when they resort to a market exchange when it suits them – policy over the relationship with the client – they have unleashed a Pandora’s box of problems with someone they once may have considered a friend of the business. Business can’t have it both ways, and if we try to, we are storing up trouble for ourselves.

Debunking of personality testing, without mentioning personality testing, is in this book with a discussion of priming and setting expectations. There are also volumes of data showing that making something free rather than reducing a price – even if the reductions are the same, can make a dramatic difference in the uptake of an offer. Buy one get one free really does work!

There is also a highly disturbing chapter on the affect of sexual arousal and decision making and morality. While I will spare you the details here it is difficult as a guy to read this chapter without recognizing oneself and feeling ashamed of the implications. This chapter does not give guys and excuse; however, it should make us pause and understand that we have the capability to be highly irrational in the right circumstances.

And that is really the crux of the book.

By recognizing that we can be irrational beings and what triggers that irrationality, we can know ourselves better and make better decisions. It also allows us to spot irrationality in others and how that has come about.

I can’t recommend this book enough.