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We are always looking at the things around us in relation to others. We always compare jobs with jobs, vacations with vacations, lovers with lovers, and wines with wines.
We not only tend to compare things with one another but also tend to focus on comparing things that are easily comparable—and avoid comparing things that cannot be compared easily.
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It's just the way we're wired. But that doesn't mean we shouldn't try to close them.
We need to drop out of committees that are a waste of our time. We ought to shut them because they draw energy and commitment away keeping doors open from the doors that should be left ope...
Most transactions have an upside and a downside, but when something is FREE ! we forget the downside, FREE ! gives us such an emotional charge that we perceive what is being offered as immensely more valuable than it really is.
And that is because humans are intrin...
We should pay particular attention to the first decision we make in what is going to be a long stream of decisions.
When we face such a decision, it might seem to us that this is just one decision, with little to no consequences; but in fact, the power of the first decisio...
We don't have an internal value meter that tells us how much things are worth; we mostly focus on the relative advantage of one thing over another and estimate value accordingly.
For example, we don't know how much a six-cylinder car is worth, but we c...
Without precommitments, we keep on falling for temptation. Resisting temptation and instilling self-control are general human goals, and repeatedly failing to achieve them is a source of much of our misery.
The struggle for control is all around us: bo...
Money is very often the most expensive way to motivate people. Social norms are not only cheaper but often more effective as well.
If corporations started thinking in terms of social norms they would realize that these norms build loyalty and—more important—make people wan...
Anchoring is a cognitive bias where an individual depends too heavily on an initial piece of information offered to make subsequent judgments during decision making.
Anchoring influences all kinds of purchases. Research found that people who move to a new city generall...
A stereotype is a way of categorizing information, in the hope of predicting experiences. The brain cannot start from scratch at every new situation. It must build on what it has seen before. For that reason, stereotypes are not intrinsically malevolent.
They provide short...
Expectations are more than the mere anticipation: they enable us to make sense of a conversation in a noisy room, despite the loss of a word here and there, and likewise, to be able to read text messages on our cell phones, despite the fact that some of the words are scrambled.
The basic idea of arbitrary coherence is this: although initial prices are "arbitrary," once those prices are established in our minds they will shape not only present prices but also future prices.
It is a cognitive bias: we tend to have a specific change in preferences between two options when also presented with a third option that is asymmetrically dominated.
This is the secret agent in more decisions than we could imagine. It even helps us decide whom to date...
Giving up on our long-term goals for immediate gratification, my friends, is procrastination.
Emotions grab hold of us and make us view the world from a different perspective. Procrastination is rooted in the same kind of problem. When we promise to save our money, we ...
... and we usually don't make best decisions when it comes to it. Why? Because of three irrational quirks in our human nature:
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The idea of ego depletion may have caught on because it satisfies a need to justify why we sometimes do things we know we shouldn't.
Instead of looking for an excuse, we should perhaps accept that we are fragile, distractible beings and cut ourselves some slack. Maybe our waning energy a...
Individuals have always had the tendency to compare themselves to others. However, this can only have negative effects on our life: it deprives you of joy, it makes you lose precious time that could have been better used otherwise, it results in frustration and hate towards the one you are co...
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