Author: Dan Ariely
If you are curious to know how the average human makes decisions this book is for you. There have been quite a few books recently on the broad topic of behavioral economics and Dan is one of the pre-eminent professors of this genre. In this book he takes a stab at poking holes in our belief that humans are rational beings and offers particular insight into our many decisions and behaviors that are quite irrational.
One of the themes of the book is summed up well in this quote: "Humans rarely choose things in absolute terms. We don't have an internal value meter that tells us how much something is worth". How do we make a value judgement that a mobile phone is worth $500, yet the app that we spend the most time on should be $1 or better still free? Ariely conducts various experiments to highlight our reliance on relative value judgements and how these can be exploited to influence purchasing decisions.
Another behavioral theme that Ariely explores in some detail is the notion of "social norms versus market norms". A social norm is one where you help a friend out, cook a great dinner for your friends or do anything else that does not involve any direct or indirect compensation. We do these out of the need and fulfillment ofour social beings. In contrast market norms are the actions we do in exchange for compensation. Ariely points out the hazards of mixing the two and how in many cases social norms are much stronger than market norms and adding a monetary compensation of any sort instantly removes the social aspect and can be damaging in many circumstances.
The book is very well written and in addition to being enlightening is entertaining as well.
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