Predictably Irrational Summary
Predictably Irrational
The Hidden Forces That Shape Our Decisions book by Dan Ariely x ________________________________________ Chapter 1: The Truth About Relativity
We always seek to draw comparisons, and we are often unaware as to how seemingly irrelevant factors such as the simple presentation of options, actually influence what we select. Thus, given three choices, A, B (very distinct, but equally as attractive as A), and A- (similar to A, but inferior), we will almost always choose A, because it is clearly superior to A-.
• Say we are trying to decide on a vacation between two choices: a Paris trip with free breakfast and a Rome trip with free breakfast. We cannot decide between the two because we love Paris and Rome …show more content…
Students were required to write three papers. o Ariely asked the first group to commit to dates by which they would turn in each paper. Late papers would be penalized 1% per day. There was no penalty for turning papers in early. The logical response is to commit to turning all three papers in on the last day of class. o The second group was given no deadlines; all three papers were due in the last day of class. o The third group was directed to turn their papers in on the 4th, 8th, and 12th weeks. o The results?
Group 3 (imposed deadlines) got the best grades. Group 2 (no deadlines) got the worst grades, and Group 1 (self-selected deadlines) finished in the middle.
Allowing students to pre-commit to deadlines improved performance
Students who spaced out their commitments did well; students who did the logical thing and gave no commitments did …show more content…
(Only $60/month on entertainment; no candy between 2 and 5 PM) Chapter 7: The High Price of Ownership
Why We Overvalue What We Have
The "endowment effect" means that when we own something, we begin to value it more than other people do.
Ariely and Carmon conducted an experiment on Duke students, who sleep out for weeks to get basketball tickets; even those who sleep out are still subjected to a lottery at the end. Some students get tickets, some don't.
• The students who didn't get tickets told Ariely that they'd be willing to pay up to $170 for tickets.
• The students who did get the tickets told Ariely that they wouldn't accept less than $2,400 for their tickets.
• Remember, these students were indistinguishable until some won the lottery and some lost.
There are three fundamental quirks of human nature:
• We fall in love with what we already have.
• We focus on what we might lose, rather than what we might gain. o When thinking about selling something, you think about all the things you'll miss, rather than the hassles of ownership.
• We assume that other people will see the transaction from the same perspective as we
The Hidden Forces That Shape Our Decisions book by Dan Ariely x ________________________________________ Chapter 1: The Truth About Relativity
We always seek to draw comparisons, and we are often unaware as to how seemingly irrelevant factors such as the simple presentation of options, actually influence what we select. Thus, given three choices, A, B (very distinct, but equally as attractive as A), and A- (similar to A, but inferior), we will almost always choose A, because it is clearly superior to A-.
• Say we are trying to decide on a vacation between two choices: a Paris trip with free breakfast and a Rome trip with free breakfast. We cannot decide between the two because we love Paris and Rome …show more content…
Students were required to write three papers. o Ariely asked the first group to commit to dates by which they would turn in each paper. Late papers would be penalized 1% per day. There was no penalty for turning papers in early. The logical response is to commit to turning all three papers in on the last day of class. o The second group was given no deadlines; all three papers were due in the last day of class. o The third group was directed to turn their papers in on the 4th, 8th, and 12th weeks. o The results?
Group 3 (imposed deadlines) got the best grades. Group 2 (no deadlines) got the worst grades, and Group 1 (self-selected deadlines) finished in the middle.
Allowing students to pre-commit to deadlines improved performance
Students who spaced out their commitments did well; students who did the logical thing and gave no commitments did …show more content…
(Only $60/month on entertainment; no candy between 2 and 5 PM) Chapter 7: The High Price of Ownership
Why We Overvalue What We Have
The "endowment effect" means that when we own something, we begin to value it more than other people do.
Ariely and Carmon conducted an experiment on Duke students, who sleep out for weeks to get basketball tickets; even those who sleep out are still subjected to a lottery at the end. Some students get tickets, some don't.
• The students who didn't get tickets told Ariely that they'd be willing to pay up to $170 for tickets.
• The students who did get the tickets told Ariely that they wouldn't accept less than $2,400 for their tickets.
• Remember, these students were indistinguishable until some won the lottery and some lost.
There are three fundamental quirks of human nature:
• We fall in love with what we already have.
• We focus on what we might lose, rather than what we might gain. o When thinking about selling something, you think about all the things you'll miss, rather than the hassles of ownership.
• We assume that other people will see the transaction from the same perspective as we