Book Outlines: Predictably Irrational by Dan Ariely

I happened across an interesting web site today: the book outlines wiki. As you might imagine, it's a wiki page where people write outlines of books they read to help them remember it better, and so that other people can learn about some books out there.

I read a particularly interesting outline there for a book called Predictably Irrational, that discusses some of our irrational ways of thinking that can be (and are quite frequently) exploited to make money.

The ideas that interested me the most in the outline were as follows:

• We compare items based on what they are next to rather than their absolute value. So if you take an expensive product and put another next to it 50% even more expensive "deluxe" version next to it, suddenly the expensive product seems like a steal.


• Once we start using a product, we tend to continue using it (if it's still enjoyable) rather than considering the relative value versus other (unknown) options. I.e. going to Starbucks instead of switching to Dunkin' Donuts, eating at our favorite restaraunts, etc.


• Free products are incredibly attractive to people because there is no perceived downside. However, I imagine getting people to convert from free to paid has got to be difficult. Not to mention, to many people they equate free = crap, possibly not even worth doing. Interesting tricks: Amazon's mechanism of giving free shipping once you spend $25, or free soup at a Chinese restaurant after you spend $15. Would like to read some more on this.


• We all tend to procrastinate, but the people who are most successful with avoiding this are the ones who realize it so build mechanisms to help prevent this, such as auto-deducts from paychecks/making appointments with friends to work out/etc.


• We're quite irrational about keeping our options open. I admit I have fallen into this trap many times! I'd like to read more on this as well: The Paradox of Choice is something I'd like to check out sometime. Looks like it's in the library system here too, w00t. Another book to get from the library: Freakonomics.

Anyway - I like the book outlines site, I should start doing this for the books I read and want to remember the points from.