Thinking books · Critical thinking · Dan Ariely, 2008

Predictably Irrational — the big ideas

Experiments showing that irrational behaviour is systematic, and therefore predictable and exploitable.

Free — no account needed to read

The big ideas

Relativity: people judge options against whatever is next to them rather than on their own terms, so adding a deliberately poor third option changes which of the first two gets chosen.

Anchoring persists long after the original number is known to be arbitrary, which affects every negotiation and every price you have ever seen.

Free is not a price but a category — it changes behaviour out of proportion to the actual amount involved.

Social norms and market norms are different systems, and introducing money into a social arrangement usually cannot be undone.

Practise it — no need to have read it

Look at a pricing page or a set of options you are choosing between. Identify which option exists mainly to make another look reasonable.

A hint: Then evaluate the one you want on its own terms, without the comparison.

Where it shows up in real life

• Purchasing decisions
• Pricing your own work
• Designing choices for other people

Described in our own words with the source named — never quoted, and not a substitute for reading the book.