Predictably Irrational: The Hidden Forces That Shape Our Decisions

by Dan Ariely

humans rarely choose things in absolute terms. We don’t have an internal value meter that tells us how much things are worth.

most people don’t know what they want unless they see it in context.

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.

That’s a lesson we can all learn: the more we have, the more we want. And the only cure is to break the cycle of relativity.

With everything you do, in fact, you should train yourself to question your repeated behaviors.

FREE! gives us such an emotional charge that we perceive what is being offered as immensely more valuable than it really is. Why? I think it’s because humans are intrinsically afraid of loss. The real allure of FREE! is tied to this fear.

“The most expensive sex is free sex.”

Because once market norms enter our considerations, the social norms depart.

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.

when a social norm collides with a market norm, the social norm goes away for a long time.

that when price is not a part of the exchange, we become less selfish maximizers and start caring more about the welfare of others.

WHEN WE BELIEVE beforehand that something will be good, therefore, it generally will be good—and when we think it will be bad, it will bad.

If we acknowledge that we are trapped within our perspective, which partially blinds us to the truth, we may be able to accept the idea that conflicts generally require a neutral third party—who has not been tainted with our expectations—to set down the rules and regulations.

“Blessed is he who expects nothing, for he shall never be disappointed.”

I suspect that most people and companies miss or ignore the fact that trust is an important public resource and that losing it can have long-term negative consequences for everyone involved.

We need to recognize that once cash is a step away, we will cheat by a factor bigger than we could ever imagine. We need to wake up to this—individually and as a nation, and do it soon.

The potential for free lunches from the perspective of behavioral economics lies in new methods, mechanisms, and other interventions that would help people achieve more of what they truly want.