A BRIEF

SUMMARY

Anubhav MishraFellow @ IIM Lucknow, (Marketing)

February, 2014

Background

An amazing book on human behavior.

This presentation is an attempt to summarize the key points and

learnings, and moreover to generate curiosity and interest in the

minds of the reader to read the actual book.

A must read book!Very inspiring!

This work can be considered as my respect to the excellent

author “Dan Ariely”.

Chapter 1 – The Truth About Relativity Tendency to compare things for

decision making, easiest

comparison wins the day.

So, try to control the circles

around us.

Change focus from narrow to

broad.

The more we have, the more we

want – understand this and break

out of it.

Chapter 2 – The Fallacy of Supply & Demand

Imprinting, anchoring and arbitrary

coherence (pearls, diamonds).

“The Adventures of Tom Sawyer” –

transform the negative experience to a

positive one.

Chapter 3 – The Cost of Zero Cost

Zero is not just another price.

Free is goooood.

Zero price effect.

Chapter 4 – The Cost of Social NormsWe are happy to help and do things, but not

when we are paid to do them.

Try offering money to your mother-in-law

for the dinner on thanksgiving!

Chapter 5 – The influence of Arousal Dr Jekyll and Hyde

Feelings (sexual arousal, happiness, anger

etc.) have an impact on decision making

Safe sex, safe driving (before the hear, and

during the heat!)

Chapter 6 – The Problem of Procrastination and Self-ControlWe can’t make ourselves do

what we want to do!

Dismal savings rates

Health care,medical check ups

Chapter 7 – The High Price of OwnershipWe overvalue what we have

For example - selling old car

We attach our memories and past and put

higher prices

What we see is the entertaining ride to Disney

park, however the buyer sees the 20,000 miles

already done

Chapter 8 – Keeping Doors Open Options beyond a particular point

distract from main objective

Multiple dating – current and with ex,

hoping to make it better

Winning strategy of XiangYu

Problem of multiple open doors

Chapter 9 – The Effect of Expectations

Mind gets what it expects

Taste tests – Pepsi and Coke –

BlindVs.Open

Neuroscience (fMRI, VMPFC,

DLPFC…)

Chapter 10 – The Power of Price 50 Cent vs. a penny aspirin

What is premium in premium

coffee?

Pricing drives the efficacy of

placebo

What if Apple starts selling a phone

for $100?

Chapter 11 – The Context of Our Character, 1

We are dishonest!

Sigmund Freud – we internalize social virtues -> superego

Internal honesty monitor is inactive for minor thefts

Read religious texts, recall professional oath, act with

integrity

Dealing with cash makes us more honest

Ten commandments

Ward robing, reporting loss for insurance

Chapter 12 – The Context of Our Character, 2

Behavioral economics

Rational vs. irrational

Order first in restaurant!

Chapter 13 – Beer or Free Lunches

Sincere thanks to the all who have created a lot of designer fonts and made them available

for free to use. I have used few of them in this presentation. Thanks!

I have used the images which are available on the public domain. In case of any copyright

issue, just let me know, so that I can remove them. The usage is purely non commercial.

Acknowledgement