Re: Ch. 3 - The Cost of Zero Cost
I don't believe he ever does explicitly define rationality, but I don't think he has to.
Behind the focus of each chapter (and I think he makes this very clear at the end) is the assumption that traditional economic models are based on actors acting in ways to maximize their benefit.
I think this is all Ariely means by being 'rational,' using it as a term to describe how that model works, and not really getting into the philosophy of if that is best, or even truly rational.
I think there is a debate on whether the actions described in this work are truly rational/irrational, but I don't think that's within the scope of the book, and don't believe it should be.
He is tearing down what traditional models say people should/will do, and these are rational/irrational are just the terms he uses, and we have to accept them as he uses them.