Recently, I have been reading quite a number of books, mainly of psychology and some other random stuff. This book: Predictably Irrational by Dan Ariely has been one of the more interesting ones.
Chapter 1: The Truth about Relativity: Everything is relative and sometimes we may like/dislike some tasks/people at a certain point in time is because of relativity too.
Chapter 2: The Fallacy of Supply and Demand: Willingness to pay is affected by many other factors, including experience and our past experience/memory.
Chapter 3: The Cost of Zero Cost: People view “FREE” as no risk, hence giving “FREE” its mighty power, resulting in irrational decisions.
Chapter 4: The Cost of Social Norms: Social norms are much more powerful than market norms. Once a relationship turn into a market norm, people consider it a market transaction and are less willing to go the extra mile.
Chapter 5: The Power of Free Cookie: Free and social norms, make us less selfish. When social norms are in place, people consider the welfare of others as well, and people look at the world as a communal good, starting to care for others.
Chapter 6: The Influence of Arousal: Passion and emotions distort rational thinking and decision making.
Chapter 7: The Problem of Procrastination and Self-Control: For those who procrastinate, forced controls or forced voluntary self control is essential. For unpleasant tasks, pairing it with something that we like can increase our motivation.
Chapter 8: The High Price of Ownership: People have a tendency to overvalue and fall in love with the things we own and be overly optimistic with ourselves, hence making irrational decisions.
Chapter 9: Keeping Doors Open: We like to keep all our doors open, but we may need to face the consequences of not deciding. Also, the time and effort spent on choosing the options may come at the expense of neglecting other aspects, which may be costly.
Chapter 10: The Effect of Expectations: Upfront knowledge and expectations shape our opinions and stereotypes, influencing our reactions, perceptions and decisions. Hence the need for neutral 3rd party during an argument. Positive expectations also allow us to enjoy things more.
Chapter 11: The Power of Price: Price changes experiences (psychologically).
Chapter 12: The Cycle of Distrust: Trust is a public good, which once lost is hard to gain back, and also affects our actual experience with the product.
Chapter 13: The Context of our Character, part i: People care more for their selfish interest when they are not being tracked, but this can be mitigated if they are consistently reminded of the correct values.
Chapter 14: The Context of our Character, part ii: People have a higher tendency to be dishonest when the transaction does not directly involve cash.
Chapter 15: Beer and Free Lunches: When in a group, people will usually make selections in a conformative manner or to make vastly unique selections (depending on culture), and hence may enjoy their experience less.
Behavioural economics is really interesting as it opens the door to how people think and make decisions – abet irrationally. Despite knowing that it is irrational, we are all guilty – don’t we? π