Predictably Irrational by Dan Ariely
As read by Rob Stokes – 29 November 2010
Economists expect us to be rational
Trouble is we are often not
The Truth about Relativity
You choose:
a) A weekend in Rome with a free breakfast
b) A weekend in Paris with a free breakfast
You choose:
a) A weekend in Rome with a free breakfast
b) A weekend in Paris with a free breakfast
c) A weekend in Paris w...
Use relativity to differentiate your offerings
As a consumer, benchmark your decisions
against a constant factor – such as your time
The Fallacy of Supply and Demand
Anchoring has a major long term effect on
our willingness to pay
Understand anchoring. Question your
repeated behaviour.
The Cost of Zero Cost
Free doesn’t obey market theory
After your name, free is the most powerful
word. Use it wisely.
Use free to trigger behaviour
Make sure you don’t pay with your time
The Cost of Social Norms
We are happy to do things, but not when we
are paid to do them
The fine changed social norms to market
norms
When a social norm collides with a market
norm, the social norm goes away for a long
time...
The High Price of Ownership
3 Quirks of human nature:
1. We fall in love with what we already have.
2. We focus on what we might lose, rather than
wha...
Try and distance yourself from the transaction
The Effect of Expectations
Beware the stereotype
The assumptions people make about your
business will influence the way they
perceive your product or service
The Power of Price
If it costs a lot, it must be worth something...
The Context of Our Character
Given the opportunity,
most people are tempted to cheat
Particularly when we are not dealing with cash
We care about honesty and want to be
honest.
The problem is that our internal honesty
monitor is active only when we contemplate
a big transgression.
Beer and Free Lunches
(or what is behavioural economics)
People are sometimes willing to sacrifice the
pleasure they get from an experience in
order to project a certain image to ...
We are all far less rational in our decision
making than standard economic theory
assumes
Furthermore, our irrational behaviours are
neither random nor senseless - they are
systematic and predictable
Behavioural economics is based on how
people actually behave, not how they would
behave if they were rational
What did I take out of this?
I run a digital marketing agency
Biggest lesson: motivating people and the
distinction between and market and a social
contract
Pink: autonomy, mastery and purpose
Economics tells you to focus on the money
I think the sweet spot is somewhere in between
My 2nd gain was as a marketer, both for my
clients and my business
Understanding what influences consumers to
purchase one item over another is a never
ending pursuit
Behavioural economics teaches us that whilst
consumers are often not rational, at least their
irrational behaviour can be ...
Thank you
Presentation: www.quirk.biz/USB-Ed
Quirk textbook: USBtextbook@quirk.biz
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
Wrfy Predictably Irrational
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Wrfy Predictably Irrational

  1. 1. Predictably Irrational by Dan Ariely As read by Rob Stokes – 29 November 2010
  2. 2. Economists expect us to be rational
  3. 3. Trouble is we are often not
  4. 4. The Truth about Relativity
  5. 5. You choose: a) A weekend in Rome with a free breakfast b) A weekend in Paris with a free breakfast
  6. 6. You choose: a) A weekend in Rome with a free breakfast b) A weekend in Paris with a free breakfast c) A weekend in Paris without a free breakfast
  7. 7. Use relativity to differentiate your offerings
  8. 8. As a consumer, benchmark your decisions against a constant factor – such as your time
  9. 9. The Fallacy of Supply and Demand
  10. 10. Anchoring has a major long term effect on our willingness to pay
  11. 11. Understand anchoring. Question your repeated behaviour.
  12. 12. The Cost of Zero Cost
  13. 13. Free doesn’t obey market theory
  14. 14. After your name, free is the most powerful word. Use it wisely.
  15. 15. Use free to trigger behaviour
  16. 16. Make sure you don’t pay with your time
  17. 17. The Cost of Social Norms
  18. 18. We are happy to do things, but not when we are paid to do them
  19. 19. The fine changed social norms to market norms
  20. 20. When a social norm collides with a market norm, the social norm goes away for a long time...
  21. 21. The High Price of Ownership
  22. 22. 3 Quirks of human nature: 1. We fall in love with what we already have. 2. We focus on what we might lose, rather than what we might gain. 3. We assume that other people will see the transaction from the same perspective as we do.
  23. 23. Try and distance yourself from the transaction
  24. 24. The Effect of Expectations
  25. 25. Beware the stereotype
  26. 26. The assumptions people make about your business will influence the way they perceive your product or service
  27. 27. The Power of Price
  28. 28. If it costs a lot, it must be worth something...
  29. 29. The Context of Our Character
  30. 30. Given the opportunity, most people are tempted to cheat
  31. 31. Particularly when we are not dealing with cash
  32. 32. We care about honesty and want to be honest.
  33. 33. The problem is that our internal honesty monitor is active only when we contemplate a big transgression.
  34. 34. Beer and Free Lunches (or what is behavioural economics)
  35. 35. People are sometimes willing to sacrifice the pleasure they get from an experience in order to project a certain image to others
  36. 36. We are all far less rational in our decision making than standard economic theory assumes
  37. 37. Furthermore, our irrational behaviours are neither random nor senseless - they are systematic and predictable
  38. 38. Behavioural economics is based on how people actually behave, not how they would behave if they were rational
  39. 39. What did I take out of this?
  40. 40. I run a digital marketing agency
  41. 41. Biggest lesson: motivating people and the distinction between and market and a social contract
  42. 42. Pink: autonomy, mastery and purpose
  43. 43. Economics tells you to focus on the money
  44. 44. I think the sweet spot is somewhere in between
  45. 45. My 2nd gain was as a marketer, both for my clients and my business
  46. 46. Understanding what influences consumers to purchase one item over another is a never ending pursuit
  47. 47. Behavioural economics teaches us that whilst consumers are often not rational, at least their irrational behaviour can be predicted and therefore better understood. This is the beginning of a journey for me.
  48. 48. Thank you Presentation: www.quirk.biz/USB-Ed Quirk textbook: USBtextbook@quirk.biz

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