Dan Ariely: Predictably Irrational

We Read For You – 29 October 2010 (As read by Rob Stokes )

Economists expect us to be rational
Trouble is we’re often not
The Truth about Relativity
You choose:

a) A weekend in Rome with a free breakfast

b) A weekend in Paris with a free breakfast
You choose:

a) A weekend in Rome with a free breakfast

b) A weekend in Paris with a free breakfast
c) A weekend in Paris without a free breakfast
The Fallacy of Supply and Demand
Anchoring has a major long term effect on
our willingness to pay
Understand anchoring. Question your
repeated behaviour.
The Cost of Zero Cost
Use free to trigger behaviour
Make sure you don’t pay with your time
The Cost of Social Norms
We are happy to do things, but not when we
are paid to do them
The fine changed social norms to market
norms
The High Price of Ownership
3 Quirks of human nature:

1. We fall in love with what we already have.

2. We focus on what we might lose, rather than
what we might gain.
3. We assume that other people will see the
transaction from the same perspective as we
do.
The Effect of Expectations
Beware the stereotype
The Power of Price
The Context of Our Character
Given the opportunity,
most people are tempted to cheat
Particularly when we are not dealing with cash
We care about honesty and want to be
honest. The problem is that our internal
honesty monitor is active only when we
contemplate a big transgression.
Beer and Free Lunches
What did I take out of this?