notes

10 Lessons from "Predictably Irrational" by Dan Ariely

1. Everything is relative: We don't value things in isolation, but compare them to others. This influences our perception of price, fairness, and even attractiveness.

2. Zero cost is costly: Free things, even if useless, are more tempting than identical things at a small price. This explains subscription traps and free trials.

3. Social norms vs. market norms: We act differently under social pressure than in market settings. We're more helpful and ethical when social norms prevail, but more self-interested under market conditions.

4. Ownership is expensive: Owning something, even if worthless, increases its perceived value and makes us less likely to give it up. This explains attachment to possessions and the endowment effect.

5. More is not better: Having too many choices can lead to decision paralysis and dissatisfaction. Simplifying options can improve decision-making.

6. Price makes us see things: Prices influence our perception of quality and value. Higher prices can make things seem better, even if the product itself is unchanged.

7. When do we cheat more? We're more likely to cheat when anonymity increases, the potential reward is high, and the risk of getting caught is low.

8. Pre-commitment for better choices: Make decisions in advance when you're calm and rational to avoid impulsive or emotionally charged choices later.

9. The passion problem: Emotions can cloud our judgment. Walk away from situations before passion takes over, or prepare for different outcomes regardless of your expectations.

10. Nudges for good: Small, subtle nudges can subtly influence our behavior towards positive choices, like healthier eating or saving more.