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Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely
Rational thoughts. Rational decision. Rational involvements. Rational statements. Rational, reasonable, sound, sensible, rationalistic, judicious…
We “invented” plenty of words and syntagmas to define ourselves especially when it comes about our social image. Because when you have to play, day by day, on the social stage, you can’t afford to lose control, to make mistakes, to seem week. Unwritten laws of the subconscious do not allow you to do that.
Are we as rational as we pretend? Do we really hold the control of everything? Or, maybe we are just fooling ourselves. And even though we know how reality looks like we choose to “invent” our own truth.
Dan Ariley. Doesn’t need any introduction. Probably you have read Irrationally Yours. Or at least you have read our book summary and checked it’s nuggets nuggets (visual quotes from books). If not, you still have time to do that For FREE!
MISLEADING MIND/ PREDICTABLY IRRATIONAL
Are we as rational as we pretend?
“My goal, by the end of this book, is to help you fundamentally rethink what makes you and the people around you tick. I hope to lead you there by presenting a wide range of scientific experiments, findings, and anecdotes that are in many cases quite amusing. Once you see how systematic certain mistakes are–how we repeat them again and again–I think you will begin to learn how to avoid some of them.”
Take seriously the promise above. Because the author perfectly described how your lecture journey will look like.
Facing the mirror, admitting that we are wrong and finding wise ways to make some changes in our favor – those may define in brief the main purpose of Ariely’s book.
And through 15 chapters this purpose is beautiful designed around 9 main concepts. I will write below about 4 of them, in order to give you enough space to discover the rest of them in Ariely’s book.
DECOY EFFECT in decision making process. This concept is also known in specialty literature as asymmetric dominance effect and means that when you have to make a choice between two things, if there’s a third one it will make one element look superior and the other one inferior.
Let’s say that you have in mind to change your job and relocate. You have two offers: the first one is for NY, with an attractive salary package, and relocation expenses reimbursed and the other one is for Paris, also with an attractive salary package and relocation expenses reimbursed. Suddenly appears a third offer: also for NY but with the same salary that you have now, and no relocation expenses reimbursed. The last offer can’t be, for sure, the winner one. But this offer focuses your attention on NY, making the first offer looking superior to the second one – for Paris.
ORIGINAL ANCHOR PRICE. Each of us has a mental map designed in our brains that confers us the comfort we need when we have to deal with something new. For instance: when you first meet somebody, which will be the topics of the small talks? Weather, zodiac signs, favorite music genres. FULLSTOP.
You already have at least two criteria to define your companion. Is he a Capricorn? Certainty you already know that he is stubborn and ambitious. Does he like rock music? You know that you have in front of you a rebel, dominant communication partner.
Preconceptions or not, things are pretty much the same when it comes about the anchor price. A consumer NEEDS to settle a landmark price for each valuable object. Having settled in his mind this anchor price, he will be able to judge others only in relation to it.
On a larger scale, this kind of less rational judgment influences a lot the relationships between supply and demand. As Ariely concludes: the supply – demand relation is more based on memory rather than on preferences.
THE “FREE” EFFECT. If something is free, it will be such a waste to lose the chance to take it, right? I’m not ashamed to admit that I often think that way. “Zero” price is a good thing and it definitely means saving money.
But saving from what? Is the thing we take even needed? Does it have the value we usually expect?
“FREE! gives us such an emotional charge that we perceive what is being offered as immensely more valuable than it really is.”
So, the FREE effect is just a trick for our own mind. That’s because in reality you may save some money for an un-needed “object”. But you also spend some “needed” and precious time only for taking advantage of opportunity.
SOCIAL vs MARKET NORMS. Have you ever done a favor for a friend? For free? If your answer is YES – and I can’t imagine somebody without doing something like that – it will be very interesting for you to understand what this concepts is all about.
“Social norms are not only cheaper, but often more effective as well.”
Money – the engine of a good motivation. This may be the mutual agreed leitmotiv of any successful corporation. It is also the hidden prerequisite of any job expectation. But a wired truth stands behind all this thoughts: we are more willing to do something for free, as a friendly gesture, rather than doing the same “job” for money.
After this long run through these 4 concepts, it’s time to say FULLSTOP again. I’m tempted to tell you more about the next 5 but it will be not fair to spoil the magic of this book.
So, we are halfway in order to discover the full answer for the initial question:
“Are we as rational as we pretend?”
I received my answers by reading this book. Now it’s your turn. And you are not going to this “trip” with empty hands. Now you have in the backpack some great nuggets and a preview for what this book’s all about.
Until you decide what you’ll put in your shopping cart – including books – you have think wise at your next decisions and try to predict irrational behaviour.
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