Decoy example in the market

A well-designed decoy can shift our decision making between two options as much as 40%.

For example, we are more likely to buy the large glass of juice at the counter when we have been provided with a choice in which the smaller glass is priced only slightly less. We tend to opt for the bigger glass (even if we don't need more juice) as it looks like a bargain.

• The Unattractive Third Option (The Decoy) has no real value in itself and is just placed to sway the decision maker towards the higher-priced option.
• The Decoy's only purpose is to make the expensive option appear like a bargain.
• This has also been widely used in subscription options of magazines and in the high-end diamond market.

The mind seems to involve various simple systems throughout the body that are not always in agreement. Some systems are shortsighted, some care about relationships, and some prioritize the future of humanity.

We are not always aware of each mechanism. Sometimes we make decisions carefully and other times intuitively.

• Highlighting the decisions of others you consider influential. Reading “Most other guests staying at this hotel reuse towels,” may make you feel compelled to align your behavior with the majority.
• “Injunctive norms” focus on how one should act in a particular situation. “Reusing towels meets a high standard for environmental responsibility,” highlights self-imposed standards. It involves a belief about right and wrong that consider abstract concepts.

It's a thinking mistake and it occurs when we confuse selection factors with results. 

Professional swimmers don't have perfect bodies because they train extensively. Rather, they are good swimmers because of their physiques.

It plays on this tendency of ours to emphasize loss over gain.

The term sunk cost refers to any cost that has been paid already and cannot be recovered. The reason we can't ignore the cost, even though it's already been paid, is that we're wired to feel loss far more strongly than gain.

• On-demand marketplaces established, in the last 10 years, new ways for people to make money - workers could easily monetize their time in specific, narrow services (food delivery, parking, or transportation). 
• These marketplaces automated the matching of supply and demand, as well as pricing and used platforms that were convenient for both the user and the provider.
• Specific platforms provided a path to self-employment for millions of people and they also homogenized the variety between service workers, prioritizing consistency and efficiency. 

New digital platforms are enabling the 'passion economy', where individuals with certain creative skill sets can earn a livelihood while doing the very thing they are good at. These platforms provide:

• Greater ability to build customer relations. 
• Increased support for expanding their business. 
• Better tools for standing apart from the competition.

Many organic farmers, especially the large ones, don’t skip pesticides and fertilizers, they just use natural options, which are hardly risk-free.

Any additional nutritional benefits from organic foods, compared with conventional, are very small.

Ultimately, if you want more nutrients, eat more vegetables, organic or not.

Design your life like a choice architect:

• Encourage smarter decisions you want to do by making them more accessible.
• Add friction to habits you want to quit, making them less accessible, or remove the option to perform them completely.

“First, never underestimate the power of inertia. Second, that power can be harnessed.” 

A consumer spends money and follows trends while an investor puts capital to work and takes advantage of trends.

Chronic consumers often go broke, and persistent investors often get rich.

• You feel the need to reward yourself after a hard day of work by buying new clothes/accessories or eating out.
• Lifestyle creep controls your expenses. When your income increases, you buy a new car or a more expensive house.
• You reserve your credit card for unexpected expenses instead of using an emergency fund.
• You rationalize using a credit card to buy things you might not purchase with a debit card.
• When something is on sale, you feel the urge to buy it, even if you wouldn't have otherwise bought it.
• You follow social trends.
• You don't think you have money to invest or the time for it.

Carpool to work if you can to significantly reduce wear and tear on your car, save on gas, and take advantage of carpool lanes that might make it easier to get to work.

Check at least once a month to keep the tires on your vehicle properly inflated. Doing so can improve your gas mileage.

Refinance your home or automobile at a lower rate to save money over the life of the loan and lower your monthly payment.

If your student loans are locked in at a high-interest rate, figure out whether it makes sense to consolidate all or some of them.

It’s when people overestimate the healthiness of a food item because of unwarranted correlations. Research indicates that this effect causes people to consume larger portions and may even be a cause of obesity. 

A study comparing the two restaurants found that those who ate at Subway underestimated the calories in their meals more than those who ate at McDonald's.

Because Subway sandwiches are considered healthier, people are more likely to add a cookie and a soda. While people who eat at McDonald's are not under the health-halo so they’re less likely to order sides with a Big Mac.

Popcorn is a great, healthy snack.

Instead of buying popcorn in microwave bags, one can also pop corn at home for much less than the bagged kind.

Bottled water drinkers give 3 main reasons for their choice: 

• Taste: Many claim their tap water tastes bad, but a simple pitcher filter can probably fix it.
• Safety: Bottled water is not necessarily safer than public water sources. A high-end filter can remove impurities from tap water.
• Convenience. A decent filter and a reusable bottle or stainless-steel flask can replace bottled water.