Before the Duke behavioral economist began serving vinegar-spiked beer at bars, haggling with pint-size trick-or-treaters over Snickers bars and having test subjects fill out questionnaires at the height of sexual arousal, he was a patient at an Israeli hospital.

Ariely was an 18-year-old Israeli fulfilling his country's military requirement when a cache of magnesium flares exploded, leaving him with third-degree burns over 70 percent of his body. He figures he endured 30 to 40 surgeries for the next three years.

A victim of circumstance, he lay in bed at the mercy of nature and nurses. He had never felt so powerless. But his mind had never been more alive.

Instead of self-pity, Ariely developed a quirky curiosity about human nature -- especially about how we are driven by forces beyond our control. This was a fruitfully contrarian mind-set for a budding economist who would study at UNC-Chapel Hill and MIT. Classic economic theory assumes that people are rational agents, pursuing their self-interest with cucumber-cool calculation.

"My experience and, later, my research, convinced me that this was not the case," Ariely, now 40, said in a recent interview. "In fact, our decision-making process is often deeply flawed, influenced by factors we are barely aware of."

He makes this case in "Predictably Irrational: The Hidden Forces That Shape Our Decisions" (HarperCollins), his fun and fascinating new book. Like the mega-best-sellers "Freakonomics" and "The Tipping Point," it describes rigorous scholarly research through highly entertaining case studies. In the process, it smashes a peer-reviewed pie in the face of all who believe they are masters of their own domains.

Ariely is not interested in extreme, make-the-front-page types of irrational behavior (e.g., Britney Spears). He focuses on common contradictions that bedevil daily life. Why, for example, would few of us accept $5 to stand in the sun for two hours but wait even longer for a "free" $4 ice cream cone? Ariely's answer: Because we overvalue free things.

Why would most people travel across town to save $7 on a $25 pen but not make the same trip to save $7 on a $450 outfit? Because our concept of money is relative.

Why would high-priced lawyers refuse to offer their services to poor clients at $30 an hour but gladly do the work for free? Because the social value of charity often supersedes the cold dictates of the market.

Ariely's observation that most of us are not strictly rational is hardly surprising. His more powerful finding is that there is method to our madness. Our irrational behavior, he writes, is "neither random, nor senseless. It is systematic. And, since we repeat it again and again, predictable." That is, given the same set of circumstances, most people will offer the same head-scratching response.

Each of the 13 chapters in "Predictably Irrational" uses creative experiments to illuminate social, emotional and psychological forces that routinely cloud our judgment.

For the chapter called "The Effect of Expectations," Ariely asked people at a pub if they would enjoy a beer laced with vinegar, then gave them a chance to find out. After sampling straight Budweiser and his balsamic brew, most favored the pale lager. Then he ran a blind test taste. And -- wouldn't you know it? -- people preferred Ariely's concoction.

"If you tell people up front that something might be distasteful, the odds are good that they will end up agreeing with you," he writes, "not because their experience tells them so, but because of their expectations."

Next page >