Dan Ariely's Predictable Irrational Summary

It is a common conception, in economics, that consumers are rational thinkers, and some economists go so far as to state that supply and demand are independent of each other: suppliers cannot influence the ‘willingness to pay’ of consumers. Dan Ariely proves this conception to not hold in our modern economy. He conducts various experiments with other researchers, with college students as participants, to supports his theory that consumers are irrational and that many factors outside the basic supply and demand model influence their decisions/actions.
In Predictable Irrational, Ariely begins with the conclusion that people always search for comparisons to make decisions become easier, but doing this leads us to sometimes include irrelevant factors that make us select the alternative that we would normally not have selected. When consumers do not know what they want, adding these irrelevant factors helps them decide on at least what they do not want. This goes further on to
Just like in the textbook, this tackles on the fact that consumer decisions are based also on social factors such as reference groups. Social groups have a direct and indirect influence on consumer buying behaviors. For example, if a friend bought a laptop and the friend is associated with having good taste, the consumer will most likely buy the same laptop, if he/she is shopping for a new laptop, because the laptop has already been associated with displaying good taste. Additionally, the second step of the consumer buying decision process is information search. In this step, information sources available to consumers are varied and include the personal category which is family, friends, etc. Therefore, when consumers are looking to buy a product they ask their friends and family about their opinion, and whether the opinion is good or bad, they associate it with the