Last week the New York Times released its list of "100 notable" books of 2008.

Two North Carolina books made the list.

Want to guess which ones?

If you keep up with North Carolina literature (or if you are a

regular reader of this column), you might guess that one of these

books is Tony Earley's novel "Blue Star," the sequel to the acclaimed

"Jim the Boy." These two novels set in the North Carolina foothills

during the time before World War II have captured the hearts of

readers across the country.

So if you guessed "The Blue Star," you get a gold star.

But I bet you a nickel that you will not be able to guess the second

one — unless you keep up with the popular books that try to explain

to laymen how people make decisions. Some people read such books to

learn how they can make better decisions. Others want to learn how

they can exploit the imperfect decision making of consumers or

potential business associates. They want to learn more "sales gimmicks."

Okay, here is the book: "Predictably Irrational: The Hidden Forces

That Shape Our Decisions." The author is Dan Ariely, James B. Duke

Professor of Behavioral Economics at Duke University.

The book's title is a good summary of Ariely's main point: Many

important decisions we make every day are not based on a rational

determination of what is best for us from an economic viewpoint.

There are two important consequences. First, we often do a terrible

job in taking care of ourselves economically. Second, the conclusions

that economists make based on a "perfect" marketplace composed of

rational decision makers can be very wrong.

"Predictably Irrational" is full of entertaining examples designed

to prove Ariely's point.

One of our irrational traits shows up when we are tricked into making

an irrational price comparison. For instance, when Williams-Sonoma

first introduced an upscale bread maker priced at $275, it bombed.

But when it developed an additional model priced even higher, the

first model became a sales success. Why? Ariely explains, "Simply

because consumers now had two models to chose from" and they would

say, "'Well, I don't know much about bread makers, but…I'd rather

have the smaller one for less money.' And that's when bread makers

began to fly off the shelves."

Ariely uses an example from Duke to show more irrationality in the

marketplace. The valuation of property, he asserts, is irrationally

influenced by the tendency of its owner of something to value it too

high. For instance, you might expect that the value of a Duke

basketball ticket would be about the same to all the student fanatics

who wait outside for days just for the chance to participate in a

ticket lottery. Whether they won a ticket or not should not affect

the value they place on it-- in a rational or perfect market.

Ariely found, however, the students who won the tickets came to

assign a much greater value than the losers. The most that the losers

would pay for the ticket was about $175. The winners would take no

less than $2000 to sell the same ticket. This owner "overvaluation"

is just one more distortion to the perfect marketplace. (Another

explanation: Duke students are greedy enough, but too poor to pay a

fair market price.)

Because "Predictably Irrational" shows so many ways we fail to make

rational choices, it can serve a very effective "self help" guide.

It may be much more important. As New York Times reviewer David

Berreby wrote, "'Predictably Irrational' is a far more revolutionary

book than its unthreatening manner lets on. It's a concise summary of

why today's social science increasingly treats the markets-know-best

model as a fairy tale."