Reddit reviews Predictably Irrational: The Hidden Forces That Shape Our Decisions

The problem here is about social norms versus market norms...

Socially you were happy to contribute (as was I), but in a market norm, the price doesn't seem like a good value (at least to me).

I donated to reddit, because I really like reddit. I have donated to support other specific media that I like as well. I donate to support This American Life and The Sound of Young America. I also support organizations that support media creation, I donate to Pro Publica and The Sundance Foundation.

I feel good about giving to all of these people, and I can give more than the "value" of what I "get", because I know I am giving. Once you are charging me, we move from a social norm to a market norm.

I think Dan Ariely explains it best...

An excerpt from Dan Ariely's Book Predictably Irrational

My good friends Uri Gneezy (a professor at the University of California at San Diego) and Aldo Rustichini (a professor at the University of Minnesota) provided a very clever test of the long-term effects of a switch from social to market norms. A few years ago, they studied a day care center in Israel to determine whether imposing a fine on parents who arrived late to pick up their children was a useful deterrent. Uri and Aldo concluded that the fine didn't work well, and in fact it had long-term negative effects. Why? Before the fine was introduced, the teachers and parents had a social contract, with social norms about being late. Thus, if parents were late — as they occasionally were — they felt guilty about it — and their guilt compelled them to be more prompt in picking up their kids in the future. (In Israel, guilt seems to be an effective way to get compliance.) But once the fine was imposed, the day care center had inadvertently replaced the social norms with market norms. Now that the parents were paying for their tardiness, they interpreted the situation in terms of market norms. In other words, since they were being fined, they could decide for themselves whether to be late or not, and they frequently chose to be late. Needless to say, this was not what the day care center intended.

But the real story only started here. The most interesting part occurred a few weeks later, when the day care center removed the fine. Now the center was back to the social norm. Would the parents also return to the social norm? Would their guilt return as well? Not at all. Once the fine was removed, the behavior of the parents didn't change. They continued to pick up their kids late. In fact, when the fine was removed, there was a slight increase in the number of tardy pickups (after all, both the social norms and the fine had been removed).

This experiment illustrates an unfortunate fact: when a social norm collides with a market norm, the social norm goes away for a long time. In other words, social relationships are not easy to reestablish. Once the bloom is off the rose — once a social norm is trumped by a market norm — it will rarely return.

The fact that we live in both the social world and the market world has many implications for our personal lives. From time to time, we all need someone to help us move something, or to watch our kids for a few hours, or to take in our mail when we're out of town. What's the best way to motivate our friends and neighbors to help us? Would cash do it — a gift, perhaps? How much? Or nothing at all? This social dance, as I'm sure you know, isn't easy to figure out — especially when there's a risk of pushing a relationship into the realm of a market exchange.

I think 40% would be a psychologically less harrowing figure.

When people see 50%, they think "they're getting just as much as I am!", but when they see 40%, they immediately think "I'm getting the majority."

I think it's more a psychological thing than about the figure itself.

Incidentally, have you ever read a book called Predictably Irrational? It's a great basic sales psychology book and such an easy read.

There is a great book that talks about this issue, and other irrational consumer behaviors.

http://www.amazon.com/Predictably-Irrational-Hidden-Forces-Decisions/dp/006135323X

> Humans are more likely to choose between two similar partners instead of considering a third, unique choice.

This isn't unique to sexual attraction. It's actually part of the human decision making process. We pick one of the two similar ones because we can compare the two together and decide which one is better. We have nothing to compare the third different option tool so in our mind it's not better than anything.

Predictably Irrational by Dan Ariely has a whole chapter on it.

predictably irrational why people do the things they do and how we come to those decisions (restaurants putting a $100 steak on the menu that nobody buys just so they can see the $80 steak and say oh thats not such a bad price since this other one is $100., or why tipping $200 on a $1000 bar tab is acceptable but it would be outrageous to do so on a $20 tab.

Well let's help Mr. Ariely sell some more books. Here's the Amazon link if anybody wants to check it out.

{I'm trying to up his sales because I enjoyed the outline so much, although even if you "ruined my social motivation" by paying me click referrals I'd probably still insert the link here.}

Bingo. I would like to add that people are not as simple as they tend to think they are. So some conditioning you apply to your self may not work as well as you think.

Willpower:Rediscovering Greatest Human Strength had an interesting example of this in it. It mentioned that when people were dieting and trying to resist the temptation of lets say a cookie it was easier for them to say "I'll have a cookie later. I don't need that one now" and never have it then for them to say "I am not going to eat that cookie".

More on this can be found in the book Predictably Irrational: The Hidden Forces That Shape Our Decisions. The author of that is a professor who will be teaching a FREE online class on the subject A Beginner's Guide to Irrational Behavior. Also the blog You are not so smart tends to be a good read as well.

Yeah, I can imagine it would gross out a straight guy as much as a woman's beaver grosses me out. shudder

And yeah, I'm not the kind of guy that can decorate or landscape or pick out clothes, just ask my gay friends. I swear, I'm going to lose my gay card one of these days. I do make a great wingman, though. Read Predictably Irrational, there's a chapter that brings up the concept of a good wingman. I wouldn't cock-block and if you looked similar to me but better than me, I'd be a perfect wingman. Apparently I was hit on regularly in college and after but was completely oblivious to it. I just thought girls were friendly. :-)

I also enjoyed Dan Ariely's Predictably Irrational. We humans have many systematic biases indeed.

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by Shiller and Akerloff

Predictably Irrational by Daniel Ariely

One Economics, Many Recipes By Dani Rodrik

Each book encourages readers to think differently about economics than the standard policy models dictate. The first two focus on the role of human psychology in economic decision making, while Rodrik's work is one of the preeminent works on second-best development economics, which looks to find policy solutions that are specific to the social, political and economic context in which they will be implemented.

Save the money and spend it on this book instead.

Some popular psychology books that are very well done:

Stumbling on Happiness by Dan Gilbert

Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely

Influence: The Psychology of Persuasion by Robert Chialdini

For a more detailed explanation of price anchoring Predictably Irrational is a fun read.

If the word 'free' had no meaning it would have been disused and left the English language by now.

Free doesn't mean that no one has ever paid money for an item in the items history, generally it means that it is was given at no cost to the ultimate recipient.

There's a great chapter about 'free' in this book.

Not particularly scholarly but for something topical and entertaining (probably best suited for introductory purposes) Predictably Irrational may be worth including. Not sure of the level of familiarity your audience has with the subject.

Learn how your brain and body effect your behavior subconsciously.

The first step in learning any practical skill is to familiarize yourself with your tools, if you want to be a woodworker, you need to understand how a saw, hammer and nails work, if you want to be a programmer, you need to understand how to type and how to use your IDE and compiler.

It's surprising to me that so few people take the time to examine how their automatic responses dictate their behavior, when it really is such a fundamental building block for any sort of mental/emotional development.

Here's a few books to get you started (you'll probably be able to find all of these at your local library as well):

How to Win Friends and Influence People

Predictably Irrational

Influence: the Psychology of Persuasion

Also, an oddly insightful series of fiction books, The War against the Chtorr series by David Gerrold expands upon the idea of treating your brain like a machine that you're been programming without knowing it since birth and how to become consiously aware of your 'programming' so that you can better direct your actions. The thought exercises he invents in the stories presents some intriguing ideas.

The point of all these books would be to help you build a base of understanding of the tools that we are ALL working with, and from there you can much more easily, and consciously work toward becoming the kind of person you want to be, whatever specific form that takes is up to you.

I think it's important to approach personal development like this, in the same way that it is important to understand how addition and subtraction work before you try to understand how calculus works :)

Predictably Irrational by Dan Ariely

...one of the best books I have read. Really puts some life decisions into perspective about why we choose the way we do.

comics about the brain :::
infographic about memory :::
biology behind alcohol-induced blackouts :::
cool awareness test :::
hodge podge of material, I'm mostly interested in neuroscience and behavioral economics, speaking of which a book called predictably irrational mentions some social experiments you could easily implement in the classroom. hope something helps.

Predictably Irrational by Dan Ariely.

Check out Predictably Irrational for a good explaination.

Thanks for sharing! Its interesting that this alternative view draws to similar conclusions:

> Standard thinking naturally assumes that big effects are due to big causes and, thus, merit major intervention. If the poor are deeply hurt
by their failure to have a bank account, then there must be compelling reasons for that failure. Behavioral research, on the other hand, has shown that highly consequential behaviors often are triggered by what are deemed to be minor causes.

The good news might be that simple and inexpensive policies have substantial impact. The cautionary news is that policymakers may need to attend to nuances they often are not trained to attend to.


I was actually expecting Shafir et al.to favor stronger intervention and an anti-market bias similar to Dan Ariely's Predictably Irrational: The Hidden Forces That Shape Our Decisions

Have you read this? Very interesting. Goes pretty deep into the psychology behind this, in a way that's easy to read.

Highly doubtful.

As an interesting aside, in Predictably Irrational, it was shown that more expensive placebos are more effective than cheap placebos.

Perhaps, but human behavior is a mix or rational and irrational, and people seem to be especially irrational when deciding whether or not to cheat at something.

Most people don't cheat in most situations because of habit and social convention, not because the risk of cheating outweighs the reward. Check out Predictably Irrational for an example of how a study influenced people to cheat more or less using social cues without changing the risk or reward of cheating.

Man, last two days have been really busy, but I did wanna get back to this.

So... First off, maybe my "how 'bout some dick" reference didn't get picked up. I could have a woman approach me, and when I ask her out, take her to dinner, walk her home, kiss her goodnight, and leave, I'm really saying, "How 'bout some dick?" Hell, I might even be saying, "How 'bout some dick--for the rest of your life?" Ultimately, that's what all advances are, regardless of the form they take, which is why I said it was "some flavor" of the famous Chris Rock line.

Now... You seem to be advancing the argument that straight men should not hit on women in a bar (and one that we've already established is not a speakeasy and not a lesbian bar), because it might make the women uncomfortable. Now, I don't think you're actually committed to this claim--it's obviously a straw man--but I did want to discuss it for just a second, because it goes further than being simply ridiculous. If a woman IS in a bar--of this sort--and a man hits on her, no matter how inexpertly, if her reaction is to become "uncomfortable," then that is extremely problematic. Turn the situation around. If a straight man goes to a gay bar and (predictably) gets hit on by men, and becomes "uncomfortable" in response, instead of simply saying, "Sorry mate, straight but not narrow here; just didn't wanna be left out of all the fun for my friend's birthday," to as many gay boys as necessary, we would understandably take the guy to task. Moreover, we probably wouldn't stop at, "Idiot, what the hell did you think was going to happen at a bar where people hit on people that look like you?" we'd probably go further and ask him what his problem was, ask him exactly how prejudiced or bigoted he is.

Now obviously there are guys who won't take no for an answer. This is why God made bouncers. They're also a straw man--nobody thinks that they're OK in any bar, gay, straight, whatever, so I'm not going to waste time pretending I have to defend them.

But I'm not going to pretend that I've actually argued my point well if I say, "wooq thinks men shouldn't hit on women in bars, hilarious!" No, your point is a larger one about women having to endure men hitting on them in general.

Now, my point about the evolutionary biology was not "Durr, you and me baby ain't nothin' but mammals," but rather to illustrate that competition for mates is a function of biological economics and nothing else--notice that female hyenas have so much testosterone that they develop pseudopenises, but the males still compete for females. Given our biological economics, men will always compete for women, because women's biological stakes in sex, their risks, are higher. They're the ones with the valuable stuff that everybody wants, so they're the ones who get to choose who stays in the gene pool and who doesn't.

Now sure, mathematically, it's in a woman's best interest if she makes the first move. Biologically and culturally, that's not how things shake out. See, human rationality is really just not as common as we'd like to think. The simple fact of the matter is that women are more likely to want to get laid when they're ovulating. One of my female friends sets an alarm in her phone so she knows not to call any men for a few days. This phenomenon isn't an accident.

Nor is a man's desire to have sex with women. Nor is it any more "disgusting" than a woman's sexual urges. We're talking about something as natural and fundamental as hunger.

So if you've got food, and somebody asks you for it, you really can't fault them. After all, they need it to live, and moreover, they're physically incapable of getting any themselves. Now you don't owe it to them, and if they ask repeatedly and harass you, or try to take it by force, then by all means, fuck those guys. Nobody disagrees with that.

Last I checked, Emily Post held that because men bear the burden of making the first move, and because non-verbal signals (hell, even verbal signals) can be uncertain and misinterpreted, every single woman owes every single man one free pass, and it is in fact a breach of etiquette to take offense or hold it against him. (Obviously she also holds that shooting him down should be done with tact and sensitivity, and that a guy should accept being shot down with grace.)

Now, a rude advance is a rude advance, and that can be held against a man, but that's because it's rude, not because it's an advance.

We're human, sure, but part of being human is fucking. It's quite literally what made us human in the first place. More often than not, that means men asking women out.

Although, I mean, if you've got some plan for the propagation of the species that doesn't involve men asking women for sex, I'd love to hear it.

The golden rule, I was raised by it, (and still follow it), then I went out into the world and found out there is a collary; those that have the gold, make the rules. It's why we have such income inequality.

I'm honest, too honest for most, and most people can't take it as that's not being 'polite.' But I still think most people just want to live their life and raise their families.

The book Predictable Irrationality describes humans honesty pretty well.

I think $80 is about what I pay for 500 weekday voice and unlimited everything else on my droid on Verizon. What's the problem?

Ah, I see. The 1500 minute plan is the same as the 500 minute plan...

My bet is that it's intentional. Pricing two plans the same leads people to think "Wow, I can get a better plan for the same price!" and they are likely to buy it. The key is that you are likely to buy from them, rather than someone else.

I read a book called Predictably Irrational a while back. They cover this trick in that book.

Dan Airely has a great book Predicatbly Irrational, which brilliantly explains this and much more.

Predictably Irrational by Dan Ariely because it shows how fucked up your brain works.

Influence by Robert B. Cialdini because it shows you how our fixed action patterns are abused daily.

>How can we expect people to respond to changes in prices, for example, or interest rates? According to the laureates' theories, they'll do whatever's most beneficial to them, and they'll do it every time.

That's the economists' theory anyway. But is that actually true? How much of what we do depends on our expectations, our past experience with prices (e.g. tolerating a high gas price simply because it isn't quite as high as it used to be) and marketing. These are psychological issues and can have a significant impact. Dan Ariely's Predictably Irrational: The Hidden Forces That Shape Our Decisions covers many more examples of this.

Maybe this is why economic policies never live up to the models.

If you want books, check out Predictably Irrational. If you're up for a light textbook, check out Thinking and Deciding.

Otherwise, you could probably get an overview from the Wiki page for Behavioral Economics.

Yeah - the problem is, we, the consumers, EVEN in the aggregate, are dumb. We don't make rational decisions as basic economics would have us believe. Nice book on the topic.