The entire premise of the book can be found in the book’s title: “People are irrational creatures.” The more we have the more we want. The only cure is to break the cycle of relativity.
My Top 5 Takeaways
Here are my top five takeaways from Dan Ariely’s book Predictably Irrational -The Hidden Forces That Shape Our Decisions.
1. Understand your biases and you’ll make better decisions
If you understand the biases you are creating for yourselves and the ones others are trying to create for you, you can optimize the decisions you make. You control the people and things you compare yourself to. There is a danger in unrealistic and ego depleting comparisons. Facebook and Instagram highlight the problem with this. These platforms profit from luring people into unrealistic and irrelevant comparisons that can wreak havoc on our self esteem and happiness.
2. Use artificial deadlines to fix procrastination
It’s no secret that people have a tendency to procrastinate. Why not create an artificial deadline to stop procrastination in its tracks? If you have an assignment at work due in three weeks, split it into three tasks and attach a short-term deadline for each task. This will eliminate the likelihood of procrastination. You can supercharge the chance of following through by implementing a punishment for not hitting your target.
3. Watch out for FREE things; they may not actually be FREE
People love free things, in part because they hate loss, and there can’t be a loss if you get the item for free. But is it really free? Let’s take the example of an item sold on Amazon for $55 plus free shipping. People almost always prefer this option to the same item at $50 plus $5 shipping. When you realize this, you can make more rational decisions about your purchases and your actions.
4. Value your time
By placing a dollar value on your time you are less likely to be lured by so called FREE items. A free ice cream isn’t really free when you factor in the time and cost of getting to the store to redeem the coupon. You should also factor how you are going to feel after you eat that ice cream 🙂
5. We overvalue things once we own them
A Duke University study highlighted this phenomenon. A group of students could win a pair of basketball tickets by entering a lottery. The group that won the tickets wouldn’t sell them for less than a staggering $2,400. Meanwhile, those who didn’t win the lottery wouldn’t pay more than $170 for the same tickets.