Predictably Irrational review – How to save money with buy smarter

About author Dan Ariely

Dan Ariely born April 29, 1967 is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University and is the founder of The Center for Advanced Hindsight and also the co-founder of BEworks. Ariely’s talks on TED have been watched over 7.8 million times. He is the author of Predictably Irrational and The Upside of Irrationality, both of which became New York Times best sellers, as well as The Honest Truth about Dishonesty.

Predictably Irrational

Do you ever but regret later because you don’t need it and don’t have intend buy it before. But you don’t understand why you decided spend money to bought it.

If you like almost people, sure you got it not less in case similar that. So, what thing effect to your decide when you buy any item and how to smarter when buy.

>> Thinking, fast and slow – anther book about mindset and make decision.

thinking-fast-and-slow-review-brain

Imagine, you are going to to buy a finance magazine, you have 3 selection:

First, e-magazine has price 59$. Second, print magazine has price 125$ and third, both electric and print has price 125$. What do you choice.

This is a research of The Economist newspaper about customer mentality. Result, only 16 peoples choose 1st, 0 people choose 2nd and 84 peoples choose 3nd and then leave 2nd method, keep 1 and 3, result had cleared change: 68 choose 1 and 32 choose 3.

So, marketing experts of The Economist catched of human mentality clear. Whereby, human often rarely choose anything based on absolute standard. Instead, we often estimate value of thing when compare with value of another thing.

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When compare relatively, noone choose 2nd because 3nd is betten than 2, course. By get 2nd choice as foundation, The Economist want to lead customer choose 3nd method. Reality, e-magazine has price 59$ and price of print magazine is cheaper than 125$ very much but when reach out 2 kinds will has more buyer.

Inside this books, the author call that: Relativily hocused our choices because not all decides of human based on clearmind. In almost case, specially when you have many choices and have correlative compare, human often irrational decide.

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To avoid irrational behaviors, we must break correlative compare. Example, you predetemine buy a new iPhone. You go to phone store and be attracted by its appearance and feautures. When you see price list, of course, you will see 2 other price. That’s make you want to buy immediately. So, to avoid irrational, you should focus vend price and ignore promotion price because it will effect to your decide.

Power of free

Free always effect to our buy behaviors hugely. We will very happy when receive a free coupon or free packets although we don’t like coffee and never using it perhaps. We will excited when receive a pen, notebook or key chain…of course, they free in a seminor although we throw away them later.

Much company use free tools to promote customer buy more products. Example, you buy a book has price 10$ and when you click order and they notify that you have to pay more 1.5$ for ship fee, you will feel unhappy. But if price is 11.5$ and free ship, you will happier.

Or another method, if you buy more another book to your invoice mostly 20$, you will be free ship or voucher, you will pay more and then i don’t using perhaps.

Free method similar that bring happy for you but make you pay more for services or products you don’t need.

Expectation Effect

If we see a picture

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Everybody has other thinking, so thinking effect to your buy decide. Back to examle buy iPhone. Many peoples are iPhone fan so price of iPhone more expensive than other kind but feautures are similar, they determinate buy iphone because their expectation and prejudice about smartphone is that.

Extrude expectation and prejudice are difficulty, but when decide you should honest yourself is prejudice dirrective to problem judge, isn’t it. Better you should consult neutral idea of realiable person.

Totally, 3 main ideas make you decide better that:

  • First, careful with relative compare. Let looking for realiaty value of problem.
  • Second, careful with free. “No free lunch”. Let buy things you need.
  • Third, you should ignore prejudice as few as to have worth decide

This is myslef review about Predictably Irrational, hope you like it.

 

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