Predictably Irrational
What’s inside
Predictably Irrational is a book by Dan Ariely. He is a professor of behavioural economics and psychology. In this book, he shares his knowledge about behavioural patterns, and explains to us, how humans behave in their day to day lives. Human behaviour is very unpredictable and irrational. This book forces us to rethink and reconsider some of our decisions and choices. It allows us to behave in a more rational way.
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Lesson 1. Consciously or Subconsciously, we are always comparing things.
The human mind is wired to search for comparisons. It can be anything, comparing people, comparing salaries, basically trying to find things to compare. We are so used to comparisons, we even do it involuntarily. For example, when we see a group of friends, our mind automatically starts comparing them on the basis of height, features, and other things. We are so used to comparing things, we don’t even realize that we are involuntarily doing that.
This tendency can be used to manipulate us as well. For example, some supermarkets or retail shops place their most expensive product next to a cheaper product. When a customer sees these two products, he realizes that the cheaper one is a better alternative and ends up buying it. The truth is that the "cheaper" product was not actually cheap, it looked cheaper because it was kept next to a very expensive product. This strategy is used by many marketers to sell some particular products, by placing them next to an expensive alternative.
Comparing can help us in better decision making, but it can also make us miserable. If we keep on comparing our personal belongings to others, we would never be satisfied with our lives and would end up miserable and sad. This is not the right mindset. Always comparing your things will eventually turn you into an envious person, and you will always feel miserable and displeased.
Lesson 2. When we are given something for free, we overlook everything else and become irrational.
When we go to a store and see a product with a tag, "Buy two get one free", our tendencies are to immediately purchase that product, because we are receiving something "for free". We then proceed to purchase two products which we absolutely don't need, just because we think that it’s a great bargain. What we don’t realize is that we are paying for two products, just to get the third one for free. Even though we are overspending, we feel like we are saving money. The word “free” forces us to believe that we are saving a lot of money. This is the power that this word holds.
Obviously, companies clocked onto this loophole and took advantage of it. Many online stores have a minimum purchase requirement to ensure that the delivery is free. People think that by purchasing things to equal that amount, they are saving up on the delivery charges, but what they
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Unlock Predictably Irrational Lessons!
- Lesson 1. Consciously or Subconsciously, we are always comparing things.
- Lesson 2. When we are given something for free, we overlook everything else and become irrational.
- Lesson 3. What we hear or see will affect how much we are willing to pay.
- Lesson 4. We become attached to the things we own.
- Lesson 5. The experiences we have are basically shaped by our expectations.
- Lesson 6. Social Norms and Market Norms are two completely different things.
- Lesson 7. Everyone is a little bit dishonest.
- Lesson 8. We need to find a perfect balance between reasonable and impulsive.
- Lesson 9. By keeping your options open, you are losing focus.
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FAQs
In the summary of Predictably Irrational book, there are 9 key lessons. These lessons include:
- Lesson 1. Consciously or Subconsciously, we are always comparing things.
- Lesson 2. When we are given something for free, we overlook everything else and become irrational.
- Lesson 3. What we hear or see will affect how much we are willing to pay.
- Lesson 4. We become attached to the things we own.
- Lesson 5. The experiences we have are basically shaped by our expectations.
- Lesson 6. Social Norms and Market Norms are two completely different things.
- Lesson 7. Everyone is a little bit dishonest.
- Lesson 8. We need to find a perfect balance between reasonable and impulsive.
- Lesson 9. By keeping your options open, you are losing focus.