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D.Ariely «Predictably Irrational: The Hidden Forces That Shape Our Decisions»

Year: 2008
Book, in which the author challenges readers' assumptions about making decisions based on rational thought. Ariely explains, "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

«All classic economic theories are based on the assumption that consumers behave rationally, despite a considerable body of evidence to the contrary. It is only in the last 25 years that economists have begun to investigate the irrational side of consumer behavior. This field of investigation, which started with the pioneering work of Tversky and Kahneman, is usually referred to as behavioral economics.
Dan Ariely's book, "Predictably Irrational", offers a clear and comprehensive overview of this fascinating subject. If you are the kind of person (like me) who can't imagine using the words 'fascinating' and 'economics' in the same sentence, don't worry, the primary focus of the book is human behavior and its peculiarities, rather than economic theory. In particular, the author is concerned with elucidating how and why people continue to engage in behavior patterns that are detrimental in the long term.
In thirteen well-written chapters, Ariely considers such topics as:
• The effect of our need for a reference point before we can judge the value of something, and how clever marketers can exploit this
• How we can become trapped by our own behavior - the importance of first decisions
• How the prospect of getting something free can override reason and logic (is it really smart to wait for free-entrance night at the museum?)
• The effect of social norms (why you are more likely to agree to help your local charity by working for nothing, than for a quarter of your normal professional rate)
• The influence of arousal (we behave irrationally in the throes of passion - what you can do about it)
• The problems of procrastination and self-control
• Our tendency to place too much value on what we already own
• The destructive consequences of people's tendency to want to keep as many options open for as long as possible
• How our expectations of something can actually influence our ability to enjoy it
• The power of price (response to a $2.50 placebo is better than that to a 10c placebo)
• In what situations are people particularly likely to behave dishonestly? How can the triggers for dishonest behavior be disarmed?
Ariely does an extraordinary job of making his material interesting and accessible to a general audience. The book was a joy to read.»

«RELATIVITY IS (RELATIVELY) easy to understand. But there's
one aspect of relativity that consistently trips us up. It's this:
we not only tend to compare things with one another but
also tend to focus on comparing things that are easily
comparable—and avoid comparing things that cannot be
compared easily»
«The basic idea of arbitrary coher
ence is this: although initial prices (such as the price of As
sad's pearls) are "arbitrary," once those prices are established
in our minds they will shape not only present prices but also
future prices (this makes them "coherent"
«The conclusion: no one is
offended by a small gift, because even small gifts keep us in
the social exchange world and away from market norms»
«This leads me to a final thought: when you're in a restau
rant with a date, for heaven's sake don't mention the price of
the selections. Yes, they're printed clearly on the menu. Yes,
this might be an opportunity to impress your date with the
caliber of the restaurant. But if you rub it in, you'll be likely
to shift your relationship from the social to the market norm.»


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