BookMarks #130: Predictably Irrational

Title: Predictably Irrational: The hidden forces that shape our decisions

Author: Dan Ariely

Genre: Non-fiction, Behavioural Economics

Published: 2008

BookMarks

Predictably Irrational is a book on a study of human decision making. How most of our decision-making is predictable and can be influenced. And even decisions which may seem irrational and random have common guiding forces.

Following are a few takeaways from the book

• Relativity: Everything is relative, all the choices we make are in comparison with something not chosen. Most people do not know what they want unless they see it in context. Marketing companies use a decoy, similar but obviously inferior, for selling the products they want to sell. We look at our decisions in a relative way and compare them to the available alternative. The more we have the more we want. And the only cure is to break the cycle of relativity.
• Law of Human Action: to make a man covet something more, make it more inaccessible for him (Mark Twain in Tom Sawyer)
• Anchor price decides what price we are willing to pay for any product
• Free has a cost. Anything offered for FREE leads to heavily irrational decisions by the purchasers.
• Social Norms vs Money Norms: People are at times more willing to do something for free or a gift than if they were to be offered money for it
• We procrastinate, delay doing things we know we have to do. Choosing instant gratification over accomplishing something.
• Ownership has a higher price - we overvalue what we have.
• Options are a distraction
• Expectations decide the actual realization
• The pricier something is, more we believe in its efficacy
• More close to actual cash, more honest humans become.

Overall, quite an interesting read. I liked the way the outcomes of the behavioural research have been presented. Probably, the entire book was an experiment in nudging towards enjoying it! After all, as the author says, we humans are predictably irrational. 

Previously on BookMarks: The Indian Spy 

BookMarks #129: The Indian Spy

Title: The Indian Spy: The true story of the most remarkable secret agent of World War II

Author: Mihir Bose

Genre: Non-Fiction, History, Biography

Published: 2017

BookMarks

‘The Man called Silver’

Hats off to a man who deceived everybody and survived the War without being hanged

This is the story of Bhagat Ram Talwar a.k.a. Silver, a Hindu Pathan, who managed to spy for multiple countries during the Second World War with his primary operations center being Kabul.

Bhagat Ram Talwar, helped Netaji Subhash Chandra Bose in escaping from India to Germany, with the help of the Italian & German embassies in Kabul. However, a communist, once Germany attacked Soviet Union, he switched over to the Russians and later on to Russia's allies, the British. Somewhere down the line he was also working with the Japanese – thus becoming a quintuple agent.

This work is primarily based on Mr. Talwar’s autobiography, with additional information from the declassified archives of the period. The book narrates quite an interesting picture of Silver and his associates, and how they went about their business of spying & double-crossing, forging new connections and switching allegiances.

Overall, quite an interesting read. Although the tale does meander around a bit and the reader may get confused in some of the characters and the multiple visits to Kabul. Given that the book’s primary source is Mr. Talwar’s autobiography, this is the picture he wanted to be presented to the world.

The book also provides an interesting perspective on Netaji and his actions during the World War II. The lens with which one judges who can be a potential ally is quite varied. And most importantly perspective changes with time and new re-alignments. Its not always a case of black and white. Instead there are many shades of grey here.

A line which stood out - ‘It is impossible, or at any rate, highly dangerous, to tell a lie until you know what the truth is going to be.’ 

Previously on BookMarks: How the World Really Works

BookMarks #128: How the World Really Works

Title: How the World really Works: A Scientist’s Guide to Our Past, present and Future

Author: Vaclav Smil

Genre: Non-fiction, Science, Society, Future

Published: 2022

BookMarks

“We have never had so much information at our fingertips and yet most of us don't know how the world really works.” This is the premise of the book as it explains the seven fundamentals of how our world really works and offers a glimpse of what the future holds. Following are a few key messages from the book

The Four pillars of modern civilization - Ammonia, Steel, Concrete & Plastic

On progress - In two centuries, the human labor to produce a kilogram of American wheat was reduced from 10 minutes to less than two seconds. An average inhabitant of the Earth nowadays has at their disposal nearly 700 times more useful energy than their ancestors had at the beginning of the 19th century.

Energy conversions are the very basis of life and evolution. However, to quote Richard Feynman – “In physics today we have no knowledge of what energy is”. Energy Studies need understanding of physics, chemistry, biology, geology with history, social, economic and political factors.

Despite all the talk of decarbonization, the high relative share and the scale of our dependence on fossil carbon make any rapid substitutions impossible.

Haber-Bosch synthesis of Ammonia can be considered the most momentous technical advancement in the world. Fifty percent of humanity is dependent on ammonia as a fertilizer for food production.

Human activity with the largest impact on the Earth's ecosystem - food production. Overall, the world loses one third of the food supply. This is a significant area to manage.

Some Interesting Facts

• A gear lever knob in the 1916 Rolls Royce was the first industrial application of plastics.
• Portland cement is thus called because it resembles the limestone found in the Isle of Portland in the English Channel in colour.
• KLM was the first airline company set up in 1921

Water is the most universally mismanaged resource

On models & extrapolations

When constructing long range scenarios, we can plug in any arbitrary assumptions in order to meet preconceived outcomes. History does not unfold as a computerized academic exercise with major achievements falling on years ending with zero or five. It is full of discontinuities and unpredictable departures.

Projections involving complex systems that reflect interplays of many technical, economic and environmental factors and which can be strongly affected by a number of arbitrary decisions such as unexpectedly generous government subsidies or new laws or policy referrals remain highly uncertain. Even near-term Outlook results in a broad range of possible outcomes.

More complex models combining the interactions of economic, social, technical and environmental factors require more assumptions and open the way for greater errors.

On scientific temper

De omnibus dubitandum (doubt everything) must remain the foundation of scientific method. Unlike what the average internet user who likes to believe in everything they see on social media.

On Future

Asking for a risk-free existence is to ask for something impossible. While the quest for minimizing risks remains the leading motivation of human progress. Crises expose realities and strip away obfuscation and misdirection.

The future, as ever, is not pre-determined. Its outcome depends on our actions. The most likely prospect is a mixture of progress and setbacks.

Overall, quite an interesting read. Also, it helps that the book is written in a post-Covid world. I especially liked the fact that the author has directly named and countered the utopian future ideas (Human 2.0 and colonizing Mars etc.) 

Previously on BookMarks: 1962 The War the Wasn’t