the hidden forces that shape our decisions

This is the endowment effect, and it plays a huge role in our decision making. We hate losing things that we have, and don’t really mind so much if we miss something altogether. We value what we already own a lot more than it deserves to. This is directly connected to loss aversion - our tendency to prefer avoiding losses to acquiring equivalent gains: it is better to not lose $5 than to find $5. We know that free is one of the strongest emotional triggers out there - just reminding your users that something is free is enough to spur them into action. In this newly revised and expanded edition of the groundbreaking New York Times bestseller, Dan Ariely refutes the common assumption that we behave in. If you’re trying to sell something, give your users easy comparisons to make so that they pick you. We usually don’t know what to make of individual numbers, and most of our buying decisions are driven by comparisons. However, if the store clerk shows you another racket which is only slightly better but is priced at $500, the $300 racket suddenly looks like a steal and you’ll be a lot more inclined to buy it. If you go to a sports goods store and all they have is one racket priced at $300, you won’t know what to make of it.

Suppose you want to pick up a new hobby, say tennis, and want to buy a tennis racket. We always try and look for an anchor before making any purchase decision. It follows the trend, set by Freakonomics, by Steven Levitt and Stephen Dubner, in discussion of esoteric. I’ll keep this review really short and cover just three main ideas that I can still recall from this book. 'Predictably Irrational: The Hidden Forces That Shape Our Decisions' by Ariely Ariely (PI), was an interesting read, and deserves to be looked at by economist, psychologist, marketer, or just people looking to improve their selves alike. If you’ve read Daniel Kahneman’s Thinking, Fast and Slow ( review), you won’t find any new ideas in this book - but it may be worth a read for new examples and case studies. Predictably Irrational is about the irrationality that goes on behind-the-scenes in our decision making. This book review brings us back to a few of my favorite topics out there: psychology, behavioral economics, and the science of making decisions.

The hidden forces that shape our decisions