Chronique littéraire 13 (Ariely)
Dan Ariely – Predictably Irrational
Another book about behavioural economics & psychology... Although there are some similarities between Thinking, Fast & Slow, in Predictably Irrational, Dan has kept the topics brief and discussions to the point with very few experiments/studies. The interest is hence better sustained, and the read easier. The premise of the book is that human beings make consistently irrational decisions. The author tries to uncover the root causes, and effects of these behaviors. For instance, he shows the huge difference there is between “almost free” and “free”; he explores the 2 norms that we live by all the times : social vs. market; he explains how and why ownership distorts the perception of value... A must-read for product managers, marketers, and everyone that can benefit from knowing more about sociology !
“humans rarely choose things in absolute terms. We don't have an internal value meter that tells how much things are worth. Rather, we focus on the relative advantage of one thing over another, and estimate value accordingly”
“Most people don't know what they want until they see in context”
“we find it easy to spend $3,000 to upgrade to leather seats when we buy a new $25,000 car, but difficult to spend the same amount on a new leather sofa”
“The more we have, the more we want. And the only cure is to break the cycle of relativity”
“Herding : When we assume something is good or bad on the basis of other people's previous behavior, and our own action follow suit. But there is also another kind of herding, one that we call self-herding. This happens when we believe something is good (or bad) on the basis of our own previous behavior.”
“Why do we have an irrational urge to jump for a FREE! item, even when it's not what we really want ? I believe the answer is this. Most transactions have an upside and a downside, but when something is FREE! we forget the downside. FREE! gives us such an emotional charge that we perceive what is being offered as immensely more valuable that it really is. Why ? I think it's because humans are intrinsically afraid of loss”
“Money is very often the most expensive way to motivate people”
“Life with fewer market norms and more social norms would be more satisfying, creative, and fun”
“When prices are zero and social norms are part of the equation, people look at the world as a communal good. [...] Not mentioning prices ushers in social norms, and with those social norms, we start caring more about others”
“we are in love with what we already have”
“Our aversion to loss is a strong emotion, [...] one that sometimes causes us to make bad decisions. [...] we often refuse to sell some of our cherished clutter, and if somebody offers to buy it, we attach an exorbitant price tag to it”
“In 210 BC, a chinese commander named Xiang Yu led his troops across the Yangtze river to attack the armi of the Qin dynasty. Passing on the banks of the river for the night, his troops awakened in the morning to find, to their horror, that their ships were burning. They hurried to their feet to fight off the attackers, but soon discovered that it was Xiang Yu himself who had set their ships on fire, and that he had also ordered all the cooking pots crushed. Xiang Yu explained to his troops that without the pots and the ships, they had no other choice but fight their way to victory or perish. That did not earn Xiang Yu a place on the Chinese army's list of favorite commanders, but it did have a tremendous focusing effect on his troops: grabbing their lances and bows, they charged ferociously against the enemy and won nine consecutive battles, completely obliterating the main-force units of the Win dynasty”
“Why are we so frequently dishonest ? This is my take. We care about honesty and we want to be honest. The problem is that our honesty monitor is active only when we contemplate big transgresssions, like grabbing an entire box of pens from the conference hall. For little transgressions, like taking a single pen or two pens, we don't even consider how these actions would reflect on our honesty and so our superego stays asleep.”
“Individuals who had mastered [...] knowledge, it was said, not only had a monopoly of practice of that knowledge, but had an obligation to user their power wisely and honestly. The oath – spoken and often written – was a reminder to practitionners to regulate their own behavior. “