Archives for category: Behavioral Economics

Best seller #1 on amazon in the category Consumer Behavior. Robert B. Cialdini shares with us some different situation where people are persuasive. I guess this book could save potentially some dollars if you are going to buy a car.

The different chapters are :

  • Reciprocation
  • Commitment and consistency
  • Social Proof
  • Authority
  • Scarcity

 

 

COMMITMENT AND CONSISTENCY :

A STUDY DONE BY A PAIR OF CANADIAN PSYCHOLOGISTS UNCOVERED something fascinating about people at the racetrack: Just after placing a bet, they are much more confident of their horse’s chances of winning than they are immediately before laying down that bet.

 

Elliot Aronson and Judson Mills, decided to test their observation that “persons who go through a great deal of trouble or pain to attain something tend to value it more highly than persons who attain the same thing with a minimum of effort.”

 

one study of fifty-four tribal cultures found that those with the most dramatic and stringent initiation ceremonies were those with the greatest group solidarity.  Given Aronson and Mills’s demonstration that the severity of an initiation ceremony significantly heightens the newcomer’s commitment to the group, it is hardly surprising that groups will oppose all attempts to eliminate this crucial link to their future strength. 

 

And I have discovered a way to handle people who try to use the consistency principle on me. I just tell them exactly what they are doing.

 

Based on the research findings we have seen, my advice would be to isolate one individual from the crowd: Stare, speak, and point directly at that person and no one else: “You, sir, in the blue jacket, I need help. Call an ambulance.”

Dan Ariely is a Professor of Psychology and Behavioral Economics at Duke University.

Dan Ariely did a class on this subject with Duke University on Coursera.org.

 

This book, published in 2008, is about Behavioral Economics. Behavioral Economics is the study between two fields : psychology and economics. The book covers a few of cognitive bias also described in the book of Daniel Kahneman, Thinking, Fast and Slow. For example the relativity between numbers or the anchors. How with are subject from our environment to build our decisions.

Dan Ariely discusses about:

  • The Free effect : Why we like so much Free! products ?
  • Some emotional decision-making experimentations.
  • And also : Social norms, why we overvalue what we have, procrastination, the expectation effect, the power of the price, …

His other books are :

The Upside of Irrationality (2010), and The (Honest) Truth About Dishonesty (2012),