If you think that you make rational, reasoned decisions, or that you are the master of your domain, etc., then you might consider reading Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely.

This book provides a very interesting glimpse into just how humans make decisions in real life—it turns out that in a variety of situations, humans are not the masters of rationality that we assume them to be.

Economics is very good at making lots of models to predict supply and demand, though a core assumption is that humans will always make rational decisions. One look at the current economy gives weight to the statement that economists have a very hard time with getting their complex models to reflect, in any reasonable way, reality. Dan’s take on economics is that humans, more often than not, make irrational decisions, leading to a new field called Behavioral Economics. Through a series of very interesting experiments, Dan shows that his suppositions are correct—humans make irrational decisions a lot, and the results of his experiments give insight into why and how people respond as they do to life situations.

Example experiments include testing human decision making when we have lots of options, how our decision making is distorted when we are sexually aroused, why we are dishonest, and how we are influenced by the placebo effect and the power of suggestion.

I found this book very entertaining—now I know why a 50-cent Aspirin works and a 1-cent Aspirin doesn’t—and I do think Dan has done a great service in highlighting and investigating how humans really make decisions, as opposed to how traditional economists assume we make decisions.