Predictably Irrational

I just landed in Sweden for the Nordic Game Conference and I’m trying to stay awake for several more hours in order to get my body accustomed to the time difference. So I apologize if this reads incoherently; I’m truly half-asleep right now…

While on the plane here, I finally finished reading Dan Ariely’s new book, Predictably Irrational. Dan was one of my professors at MIT and is an all-around great guy. His book does a wonderful job of explaining how human beings are consistently irrational in many situations (such as when we make purchase decisions), and more importantly, it explores the implications of this irrationality for individuals, businesses, governments, and society at large. I don’t recommend books very often, but this is one that everybody should read. It is business book, self-help guide, and profound social commentary all in one tidy package.

Of course, while I was reading the book, I couldn’t help but tie back some of its lessons to video games. For example:

Dan writes quite a bit about pricing strategies, and how they can be used to take advantage of our predictable irrationality. One section in particular on the power of “free!” was obviously quite relevant to our industry given the rise of F2P games. Through multiple studies, Dan has found that the allure of free will not only cause people to consume things they otherwise would not have consumed (obvious), but will also cause them to forgo real bargains on products they prefer and could easily have afforded. This raises big questions for developers who plan to compete against F2P games on the PC primarily on the basis of quality…

Predictably Irrational also makes some interesting points about how everything is relative to human beings, including price. For example, restaurants can cause you to spend more simply by putting a very high-priced item on the menu. You probably won’t buy that item, but seeing it makes you more likely to buy the second or third most expensive item on the menu. Interesting examples like this made me wonder: how many F2P games have outrageously expensive virtual items for the sole purpose of driving up consumption of less expensive items “on the menu?”

One fascinating section on ethics and honesty noted that you could dramatically cut down on cheating in exams if you simply asked students to recall the Ten Commandments before they took a test, or (more pointedly) by reminding them of a school honor code. But you had to do this right before the test — it couldn’t happen weeks before and retain the effect. This made me wonder if online games, many of which have serious problems with griefers and other anti-social types, might benefit greatly by simply requiring users to read a one-sentence statement on positive social behavior each time they log in.

Anyway, there was so much more to the book than this. You really should check it out.

17 Responses to Predictably Irrational

  1. Saw this kicking around at work. It looks incredibly interesting, thanks for the little snippets from it — makes me want to read it more. :-)

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