Thursday, June 13, 2013

BOOK REPORT: Predictably Irrational, the Hidden Forces That Shape Our Decisions

Were you an evil mastermind, you’d use the insights in Predictably Irrational to manipulate the behavior of others to do as you wished.

That's my one sentence blurb on the book. A somewhat longer (but by no means exhaustive) overview of the book follows.

Key Insights Of Predictably Irrational 
    1) Relativity
    2) Decoys, Anchors, and Ownership
    3) Power of Expectations

Decisions can’t be made in a vacuum. Without context, we can’t choose. Which means that when we do make decisions, that decision is made relative to a related piece of information. What that related information is shapes the decision that follows. It can’t logically be otherwise.

Decoys, Anchors, and Ownership 
Someone who understands the relative nature of decision making can design related information that serves as either a decoy or an anchor.

A decoy is designed to make us compare something the decoy-setter wants us to do, think, or buy with something else that seems like a worse action, philosophy, or deal.

An anchor sets an expectation, and as such it is a kind of decoy. It is usually a presented as a price, giving the would-be buyer a sense of how much something should cost. A high price for a bottle of wine on a menu conditions the buyer to be more willing to spend more for any wine bought. A feeling of ownership is a particularly pernicious anchor.

A feeling of ownership magnifies the perceived value of an item, a story or piece of art, or even a concept or ideology over the ACTUAL value of the item by at least an order of magnitude in the “owner’s” mind.

Power of Expectations
Expectations influence not only psychology, but also physiology, like a placebo. For example, when people expect an aspirin to make them feel better, they begin to feel better even if the actual tablet given is a sugar pill. When people expect to be fed, they salivate. When they expect a particular outcome, they are more likely to ignore indications that other outcomes are possible. When people are asked to recall the 10 commandments or any code of ethics before taking a test, they do not cheat even if cheating is easy.

This book offers a trove of psychological truths of interest to anyone with a human brain. It's useful both in understanding some of your own irrational instincts, as well as those of others.

For instance, the book describes how people are drawn to keeping all options open, despite that bad consequences usually follow from keeping all options open too long. It’s true in life, such as when keeping too many romantic partners available instead of concentrating on the one most likely to bring lasting happiness. #SFWApro

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