We love what we own simply because of our memories and fantasies about it (“I loved wearing this shirt at work/I’ll have so much fun at the game”).We hate losing things we own, whereas we don’t mind missing out on something all that much.Usually, we expect others to think highly of the same things we do (“If I like this carpet, I’m sure all my friends will like it too).

3. The Endowment Effect Causes You To Overvalue What You Own

Here's a short summary of the book. I definitely recommend a read.

Summary Of The Book

1. We compare whatever we can, so give others easy comparisons to pick you.2. Free is really just another price, but a powerful one.3. You overvalue what you own.

3 Mains Lessons From The Book

This has to do with our incredibly strong tendency to avoid losses wherever possible. If we buy something and it’s bad, we lose money. But if we get something for free, the potential downside is zero. It still might be good for us, though, so we value free items much more highly than we should.

2. Free Is Just Another Kind Of Price, A Very Powerful One

Predictably Irrational explains the hidden forces that really drive how we make decisions, which are far less rational than we think, but can help us stay on top of our finances, interact better with others and live happier lives, once we know about them.

1-Sentence Summaey

We’re wired to compare things, and our brains do so in the easiest way possible.We compare what’s right in front of us, not necessarily what we should think about or look at that might not be around at the time.So if you give people options to compare yourself or your products to, which are slightly worse, they’ll pick you more often.

1. Give Others Easy Comparison

Intelligent, lively, humorous, and thoroughly engaging, "The Predictably Irrational" explains why people often make bad decisions and what can be done about it.

philosophy

Philosophy

personaldevelopment

Personal Development

education

Learning & Education

books

Books

<ul> <li>Why do our headaches persist after taking a one-cent aspirin but disappear when we take a 50-cent aspirin? </li> <li>Why does recalling the Ten Commandments reduce our tendency to lie, even when we couldn't possibly be caught? </li> <li>Why do we splurge on a lavish meal but cut coupons to save twenty-five cents on a can of soup?</li> <li>Why do we go back for second helpings at the unlimited buffet, even when our stomachs are already full?</li> <li>And how did we ever start spending $4.15 on a cup of coffee when, just a few years ago, we used to pay less than a dollar?</li> </ul> When it comes to making decisions in our lives, we think we're in control. We think we're making smart, rational choices. But are we? In a series of illuminating, often surprising experiments, MIT behavioral economist Dan Ariely refutes the common assumption that we behave in fundamentally rational ways. Blending everyday experience with groundbreaking research, Ariely explains how expectations, emotions, social norms, and other invisible, seemingly illogical forces skew our reasoning abilities. Not only do we make astonishingly simple mistakes every day, but we make the same types of mistakes, Ariely discovers. We consistently overpay, underestimate, and procrastinate. We fail to understand the profound effects of our emotions on what we want, and we overvalue what we already own. Yet these misguided behaviors are neither random nor senseless. They're systematic and predictable—making us predictably irrational. From drinking coffee to losing weight, from buying a car to choosing a romantic partner, Ariely explains how to break through these systematic patterns of thought to make better decisions. Predictably Irrational will change the way we interact with the world—one small decision at a time.

Dan Ariely is the James B. Duke Professor of Behavioral Economics at Duke University. He also holds an appointment at the MIT Media Lab where he is the head of the eRationality research group. He was formerly the Alfred P. Sloan Professor of Behavioral Economics at MIT Sloan School of Management.Dan Ariely grew up in Israel after birth in New York. He served in the Israeli army and when 18 suffered third-degree burns over 70 percent of his body from an accidental magnesium flare explosion during training.Ariely recovered and went on to graduate from Tel Aviv University and received a Ph.D. and M.A. in cognitive psychology from the University of North Carolina at Chapel Hill, and a Ph.D. in business from Duke University.

3 Mains Lessons From The Book

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