![]() I've been going through Dan Ariely's books pretty much in reverse order, and I just finished reading the last one to complete my collection: Predictably Irrational: The Hidden Forces That Shape Our Decisions. I could see in this book many of the seeds of ideas that he would expand on in subsequent books, such as about dishonesty and the irrationality of too many options. I enjoyed his description of the experiments, and I liked how each chapter went through one major source of irrationality and how it can be used to predictably influence people (reminds me of Cialdini and Munger). Below are my notes on this one. Intro Injury Quick fast pain better than slow low pain? His research showed no for bandage removal. Science as area where anyone can come up with alternative theory and empirical test to check it Behavioral economics 1 relativity Humans rarely choose on absolute terms Everything relative Decoy option We compare what is easily comparable but don't compare what is hard to compare We like to make decisions based on what we understand Put in option which is less attractive to increase attractiveness of base option Can change our focus and circles we go in to change what we compare to Change the frame of relativity The more we have the more we want 2 fallacy of supply and demand To make man want something, make it difficult to obtain Imprinting of first impression Anchors Arbitrary coherence First decisions translate into long term habits Herding and self herding 3 cost of zero cost: why we pay too much whn we pay nothing Zero is source of irrational excitement Big difference between zero and tiny 4 cost of social norms: offers of direct payment kills social norms Two separate worlds: market and social Can't mix social and market norms Ppl work more for cause than for cash Don't mention prices in relationships Money most expensive way to motivate people 5 influence of arousal People react and predict very differently when calm and cool than when aroused 6 problem of procrastination and self control Use rules to impose personal control 7 high price of ownership: why we overvalue what we have We focus more on what we will lose than gain We expect buyer to see same perspective as we Trial promotions View transactions as nonowner 8 keeping doors open: why options distract us from our main objective Irrational compulsion to keep options open in life even when worse for us Consider time wasted while trying to make decision or keeping doors open 9 effect of expectations: why mind gets what it expects See events as u want to Dish names affect taste Presentation affects taste 10 power of price Placebo surgeries Power of suggestion Belief and Conditioning Price changes experience What u pay is what u get 11 context of our character: why we are dishonest Honest ppl cheat 10% even if can cheat more with no risk Just reminding people about morals or just to recall them made them more honest Professional oaths Decline in professionalism Signing name to oath 12 context of our character: why dealing with cash makes us more honest People take items more readily than taking cash Easier to cheat when one step removed from money When medium of exchange is nonmonetary then it is easier to rationalize Dealing with cash is like being primed by honor code 13 beer and free lunches When u order first u r happier than if listen to others order before u Behavioral economics and irrationality imply there are free lunches
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