ieskvm.blogg.se - Predictably irrational book

Relativity doesn’t just drive irrational decision-making-it makes us miserable.

Then, because the -A option is clearly worse than the A option, A will be your final decision-just as the salesperson intended. Because the two “A” options are more easily comparable than A and B, you’ll quickly reject option B. This option is similar to-but worse than-one of the options.

When you’re deciding between two options (A and B) and their accompanying attributes, you’ll likely be presented with a decoy third option (-A).

Salespeople know this and play into it.

We compound the decoy effect by making irrational comparisons-we tend to focus on similar, easily comparable products and reject products that are different and thus less easily comparable. However, if the print-only option weren’t included, you’d likely choose the cheapest option, internet-only.

Instead, you’ll choose the bundle, which appears to offer two media for the price of one. It’s much more expensive than the internet option, even though both options include only one medium. You’ll likely conclude that the print-only option-the decoy-is a rip-off. For example, an advertisement for magazine subscription bundles might include three options: internet only for $59/year print only for $125/year and an internet and print bundle for $125/year.That is, they present you with options, including a clearly unfavorable option-the “decoy”-to trigger a comparison that will guide you toward a specific choice. Many advertisers play into this need using the decoy effect. Because of our need for guidance, relativity has a powerful influence on how we make decisions. We don’t have an inherent sense of the value of things, so we resort to surmising the value of an item by considering its relative advantage or disadvantage over another. It’s human nature to make comparisons to find guidance toward the “right” choice. Armed with this knowledge and awareness, you can consciously avoid the triggers of irrationality and improve your decision-making skills. The good news is, it doesn’t need to be this way-here, we’ll discuss common pitfalls of human logic, and explore the forces that really drive your actions. Instead, we continue making the same mistakes-we’re not only irrational but predictably so. On the other hand, behavioral economics argues that humans frequently act irrationally, and we often don’t realize our errors at all. Standard economic theory relies on the idea that humans use infallible logic when making decisions, and even when we make wrong decisions, we quickly realize and remedy them. 1-Page Summary 1-Page Book Summary of Predictably Irrational