
Predictably Irrational
Brief Summary
What if we can explain and predict human irrationality? In “Predictably Irrational”, the author demonstrates some little-known levers of influence on people and gives examples of using these techniques. Despite the innate unpredictability of human behavior, the book argues that there are patterns that we can understand and use to our advantage.
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Key points
Key idea 1 of 9
Have you ever noticed how often we bring home all sorts of trash from meetings? Or have you wondered why we are so eager to buy two products to get the third one for free without giving this decision a second thought? We should blame this on the word "free," a powerful tool that controls our emotions.
In an experiment, participants had to choose between two options: delicious Lindt truffles for 15 cents each or not-so-good Hershey's Kisses for 1 cent each. Almost three-quarters of the respondents chose the more expensive and delectable chocolate.
Guess what happened when the price of both chocolates was reduced to 14 cents per Lindt truffle and 0 cents per Hershey's Kisses? 2/3 of the people chose the free chocolate over the tastier one at a reasonable price. This experiment demonstrates the power of the word "free" in controlling our emotions and decision-making.
So why do we sometimes act unreasonably? The answer is simpler than it seems: we fear taking risks. Every purchase carries a risk because if the product doesn't meet our expectations, then we have wasted our money. We hate to see our dollars go down the drain. Therefore, we often succumb to the zero-price effect. It suggests that we value certain things the most when they carry no potential risk and do not cause disappointment.
Big companies and corporations often use this powerful tool of influence. For example, customers on the Amazon site often accept an offer to buy one more book to get free shipping. It would be worthwhile for the government to take note of such techniques. For example, for citizens to keep track of their cholesterol levels regularly, this medical service should be made not just cheap but free!
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