Predictably Irrational

This book explores how we behave under certain circumstances, often recreated in the market. I thought it was an interesting thing to read as I was reading The Paradox of Choice: Why More Is Less.

There’s a number of experiments held in this book each looking at specific scenarios to determine what causes irrational behavior. I thought the experiment where understanding how and when a student will decide to cheat was fascinating. I especially thought that when he threw in the experiment about students who read the ten commandments first.

He gets into experiments where people make decisions while aroused, our sense of ownership, decoy options in pricing, anchored experiences etc.. All with good detail and examples to help solidify the understanding.

Some big takeaways I got from here were:

• We are irrational when it comes to Free or to ‘Zero’
• Arbitrary coherence between things cause us to behave irrational (in absence of rational understanding)
• We focus on the easy comparisons when making decisions
• Social norms and Market norms cause us to make decisions differently
• Often we focus on what we lose, rather than what we gain
• Assume that everyone sees things the way we see it
• We fall in love with what we already have
• When something is a step removed, we act more irrational towards it

A great read especially since I manage a product. Similar to my reasons for reading Paradox of Choice I had a high interest in this because of my vocation. Highly recommended!