Neither a book on the “subconsciousness” nor a “book of psychological tricks, Predictably Irrational by Dan Ariely is a foundational text in behavioral economics.

The core thesis of the book is that humans are not the perfectly rational actors that traditional economics assumes we are. However, our irrationality is not random; it is systematic and predictable. The book explores how:

• Relativity skews our perception of value.
• Emotions temporarily override long-term goals.
• Social norms conflict with market norms (why doing something for free feels good, but doing it for a penny feels insulting).
• Ownership makes us overvalue what we already have (the endowment effect).

Key Takeaways

This book teaches one what a real rational person is like:

• Those who keeps their superego in whatever emotional, situational, or environmental state
• Those who can stand on the psychology of losing their precious ownership on something they value and keep moving on
• Those who live by principles and not by feelings (which is why people ought to study Philosophy, History, and Science to train the skill of being rational)

In addition, the author’s “extra” curiosity is what opens up the world of human’s irrationalities. A tiny detail in life ignorable by almost anyone is often picked up by Dan as the starting point of a rather astonishing discovery about irrationality of minds. Surely, human’s irrational world has just been explored by just a less than 1% in this book. What should be taken away, in addition, is the methodology Dan employed:

1. Start with observation
2. Conduct scientific experiments (or, for us, searching materials online for answers)
3. Make conclusion
4. Make deduction

Relativity#

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• “Humans rarely choose things in absolute terms. We don’t have an internal value meter that tells us how much things are worth. Rather, we focus on the relative advantage of one thing over another, and estimate value accordingly.”
• “Most people don’t know what they want unless they see it in context and make comparison. Everything is relative. We are always looking at the things around us in relation to others”

- Dan Ariely

Chapter 1 of Dan Ariely’s Predictably Irrational is fundamentally about the human mind’s absolute reliance on relativity. We rarely assess the value of things in isolated, objective terms because we do not possess an internal measure that tells us exactly what something is worth. Instead, we understand value only by comparing one thing to another, specifically to whatever happens to be immediately adjacent to it.

Ariely illustrates this cognitive blind spot through a famous pricing experiment involving subscriptions to The Economist magazine:

When students were offered a choice between a web-only subscription for fifty-nine dollars or a print-and-web subscription for one hundred and twenty-five dollars, the majority chose the cheaper web-only option. However, when a third option was introduced—a print-only subscription also priced at one hundred and twenty-five dollars—everything shifted. Suddenly, the print-and-web combination looked like an undeniable bargain compared to the clearly inferior print-only choice, prompting most people to abandon the cheap tier and choose the most expensive one. The print-only option was a “decoy,” an alternative designed not to be chosen, but to manipulate the perceived value of the target option.

This mechanism extends far beyond financial transactions into real estate, dating, and everyday decision-making. Ariely demonstrates how the introduction of a slightly inferior version of a house, a vacation, or even a potential romantic partner immediately elevates the appeal of the original, superior version. We are drawn to comparisons that are easy to make and actively avoid comparisons that require deep analytical thought. If we are choosing between an apple and an orange, the choice is difficult; if someone introduces a slightly bruised apple to the mix, we suddenly strongly prefer the pristine apple, completely forgetting about the orange.

The chapter concludes with the broader implications of relativity on human happiness and agency. Because we continually compare our salaries, achievements, and lifestyles to those of our immediate peers, this cognitive habit breeds envy and perpetual dissatisfaction. Ariely suggests that breaking free from this cycle requires consciously shrinking our circles of comparison and recognizing when the environment has been structured to artificially guide our choices. Recognizing the presence of decoys allows a person to strip away the manufactured context, override the impulse of relative comparison, and make a truly autonomous evaluation of what they actually value.

Anchoring Effect#

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• “Initial prices are largely “arbitrary” and can be influenced by responses to random questions; but once those prices are established in our minds, they shape not only what we are willing to pay for an item, but also how much we are willing to pay for related products (this makes them coherent).”
• “First impressions are important … we base decisions on our fundamental values - our likes and dislikes”

- Dan Ariely

Chapter 2 of Predictably Irrational dismantles the foundational economic assumption that supply and demand are independent forces that naturally find a rational equilibrium. Ariely introduces the concept of “arbitrary coherence,” which posits that the initial prices we accept for goods or services are completely arbitrary, but once those prices are established in our minds, they become rigid “anchors”. From that point forward, all our future decisions regarding those items are strictly and logically measured against that initial, random anchor. He compares this human cognitive vulnerability to Konrad Lorenz’s goslings, which biologically imprint on the first moving object they see; humans similarly imprint on initial prices and environmental valuation signals.

To demonstrate how easily these psychological anchors are forged, Ariely details a classroom experiment where students were asked to write down the last two digits of their Social Security numbers. They were then asked to use those digits as a hypothetical dollar price and bid on items like wine and chocolate. The students with higher Social Security numbers consistently bid significantly more for the items than those with lower numbers. A completely irrelevant data point successfully hijacked their perception of value, proving that our baseline willingness to pay often stems from environmental suggestion rather than a rational calculation of utility.

The chapter scales this mechanism up to real-world market manipulation. Ariely explains how the Tahitian black pearl transitioned from an unwanted, valueless byproduct into a coveted luxury item simply because a clever marketer placed it in a Fifth Avenue window display next to diamonds with an exorbitant price tag. Similarly, he analyzes how Starbucks successfully broke the existing, low-price anchor of diner coffee. By entirely changing the physical environment, using a distinct vocabulary, and introducing unique cup sizes, Starbucks severed the old cognitive anchor and allowed consumers to imprint on a completely new, artificially high price point.

Ultimately, the fallacy of supply and demand reveals that consumer preferences are heavily manipulated by the very forces dictating the supply. If human valuations are shaped by historical accidents and calculated marketing rather than objective utility, the classical economic model of rational actors interacting freely is deeply flawed. For anyone pursuing genuine self-determination, the chapter serves as a stark warning: exercising true autonomy requires actively interrogating our own deeply held anchors to determine if our desires are actually our own, or merely the lingering echoes of a manufactured first impression.

The Cost of Zero Cost#

In this chapter, Dan Ariely explores the irrational psychological power of the word “free.”

According to traditional economic theory, a price drop of one cent should only marginally affect consumer behavior, regardless of what the original price was. However, Ariely demonstrates that zero is not just another price. It is an emotional hot button that completely short-circuits our ability to perform a rational cost-benefit analysis.

To prove this, Ariely conducted an experiment using two types of chocolate: a high-quality Lindt truffle and a standard Hershey’s Kiss. Initially, he priced the Lindt truffle at 15 cents and the Hershey’s Kiss at 1 cent. Given the incredible value of the premium truffle at that price, nearly three-quarters of the participants chose the Lindt chocolate. Then, Ariely lowered the price of both items by exactly one penny. The truffle became 14 cents, and the Hershey’s Kiss became free. Even though the relative price difference remained exactly the same - 14 cents - the behavior of the participants completely flipped. More than two-thirds of people suddenly chose the free Hershey’s Kiss, irrationally walking away from a vastly superior deal simply because the other option cost nothing.

Ariely explains this phenomenon through the psychological concept of loss aversion. Whenever we make a purchase, there is a psychological burden - a perceived risk that we might make a bad decision and lose value. When an item is free, we perceive it as entirely risk-free. This absence of a financial downside makes us irrationally overvalue the free item, and as a result, we completely forget the hidden downsides of the transaction.

A prime real-world example of this is Amazon’s introduction of free shipping for orders over a certain dollar amount. Consumers who only needed a single book would routinely buy a second book they did not even want, spending more money overall just to avoid a small shipping fee. Interestingly, when Amazon rolled this out globally, sales jumped everywhere except in France. It turned out the French division had reduced the shipping cost to a mere one franc (about 20 cents) instead of making it completely free. Because it was incredibly cheap but not perfectly free, buyers still evaluated the purchase rationally. Once Amazon France dropped that final 20-cent charge and made shipping exactly zero, their sales skyrocketed to match the rest of the world.

The overarching lesson of the chapter is that zero cost often comes with a hidden price. Whether it is waiting in a seemingly endless line for a free promotional item, or cluttering our homes with complimentary junk we will never use, the emotional allure of “free” frequently leads us to make decisions that cost us disproportionately in time, effort, and actual money.

Social Norms v.s. Market Norms#

Chapter 4 of Predictably Irrational explores the profound friction between the 2 distinct domains that govern human behavior:

1. the realm of social norms, and
2. the realm of market norms

Ariely argues that we navigate life by seamlessly switching between these two spheres, but unexpected and often catastrophic misunderstandings occur when their boundaries blur.

Social norms encompass warm, communal requests driven by mutual reciprocity, obligation, and human connection, where immediate payback is neither expected nor desired. Market norms, conversely, are sharply defined by precise financial exchanges, wages, rents, and strict cost-benefit analyses.

To illustrate this division, Ariely highlights an instance where lawyers were asked by the AARP if they would offer services to needy retirees at a deeply discounted rate of thirty dollars an hour. The lawyers overwhelmingly declined. However, when asked if they would provide the same services entirely for free, the majority agreed. Introducing a financial element, even a charitable one, instantly transported the request from the domain of social duty into the realm of market compensation, where the rate felt insulting.

The central danger Ariely exposes is that when market norms are introduced into a social exchange, they obliterate the social norms, and those social bonds are exceptionally difficult to restore. He points to a famous study of an Israeli daycare that introduced a financial penalty for parents who picked up their children late. Instead of deterring the behavior, late pickups actually increased. The introduction of a fine transformed a moral obligation, the guilt of inconveniencing the teachers, into a simple transactional purchase. The parents felt they were now just buying the right to be late, completely severing the social restraint. When the daycare later removed the fine, the late pickups remained high, proving that once a market norm displaces a social one, the social fabric does not easily weave itself back together.

“There are no friends in the office”

The adage “there are no friends in the office” is the direct consequence of the inevitable, destructive collision between social norms and market norms.

For anyone fiercely guarding their own agency, understanding this dichotomy is essential. Institutions and corporate entities frequently attempt to cultivate social norms, insisting they treat customers like friends or employees like family, specifically to elicit the loyalty and uncompensated effort that thrives in the social realm. Yet, the moment the institution enforces a market norm, such as a sudden layoff or a strict penalty fee, the illusion collapses. Maintaining genuine self-determination requires recognizing exactly which set of rules we are interacting with, ensuring we do not surrender the authentic obligations of human connection to the cold, transactional dictates of a market exchange.

We are Easily Switched to Our Dark Side on Arousal#

Chapter 5 of Predictably Irrational exposes the profound delusion of a unified, consistently rational self. Ariely demonstrates that intense physical or emotional states - specifically sexual arousal though, the principle applies equally to rage, extreme hunger, or fear - do not merely influence our judgment; they effectively usurp it, replacing the rational actor with an entirely different psychological entity whose priorities are biologically hijacked.

To quantify this cognitive fracture, Ariely conducted an experiment with male university students, asking them to answer a series of questions about their moral boundaries, willingness to engage in risky behavior, and adherence to safe-sex practices while in a calm, “cold” state. He then required the same students to answer the identical questions while in a “hot” state of high sexual arousal. The results revealed a staggering predictive failure. In the cold state, the students confidently projected a firm adherence to their moral principles and logical safety protocols. Yet, in the hot state, their willingness to engage in risky, manipulative, or unethical behaviors surged dramatically, completely obliterating the boundaries they had firmly established just hours prior.

The core psychological failing identified in this chapter is not simply that passions can overpower reason, but that our rational selves are structurally incapable of predicting the sheer force of our visceral states. When we are calm and rational, we cannot accurately simulate the blinding intensity of arousal, anger, or desperation. We fundamentally underestimate how a biological drive will narrow our focus, dissolve our ethical constraints, and entirely rewrite our preferences in the moment. We assume our “cold” self will remain in control during a “hot” situation, which Ariely proves is a dangerous cognitive illusion.

For an individual committed to genuine autonomy and the exercise of free will, this chapter presents a formidable challenge. It proves that relying on sheer willpower or rational deliberation in the midst of a visceral emotional spike is a failing strategy, because the rational self is essentially locked out of the decision-making process at that moment. Therefore, exercising true self-determination requires preemptive action. It necessitates acknowledging the biological reality of these “hot” states and making conscious, binding decisions - such as entirely avoiding specific environments, removing temptations, or setting hard external constraints - while the rational, “cold” self is still sovereign.

Overcoming The Dark Side of Procrastination#

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• “Tightly restricting the freedom (e.g equally spaced deadlines) is the best cure for procrastination.”
• “Although almost everyone has problems with procrastination, those who recognize and admit their weakness are in a better position to utilize available tools for precommitment and by doing so, help themselves overcome it.”

- Dan Ariely

Chapter 6 of Predictably Irrational addresses the fundamental failure of self-control, examining exactly why we consistently sacrifice our long-term goals for immediate gratification despite knowing better. Ariely frames procrastination as the continuous, predictable defeat of our rational, forward-planning self by our impulsive, immediate-desire self.

To test how effectively people can manage their own procrastination, Ariely conducted an experiment across 3 of his university classes, assigning each class 3 papers with different deadline structures:

1. The first class was subjected to strict, externally mandated deadlines spaced evenly throughout the semester.
2. The second class was given total freedom, with all three papers simply due on the last day of class.
3. The third class was allowed to choose their own deadlines at the beginning of the semester, but once chosen, those dates became strictly binding.

The results starkly mapped the limits of self-discipline. The class with the externally mandated deadlines achieved the highest grades, while the class with total freedom performed the worst, waiting until the last minute and turning in rushed, inferior work. The class that set its own binding deadlines landed in the middle. This proved 2 things:

1. Given the opportunity, people generally recognize their own tendency to procrastinate and will willingly set guardrails;
2. People are still overly optimistic about their willpower and often space their self-imposed deadlines sub-optimally.

This presents a profound dilemma for anyone committed to individual liberty and self-direction. Absolute, unstructured freedom often leads to failure because it leaves us highly vulnerable to the immediate, irrational impulses discussed in the previous chapter. Conversely, relying on an external authority to dictate our schedules removes our agency entirely. Ariely suggests that the most effective way to exercise true free will is through the use of pre-commitments. By recognizing our inherent vulnerabilities while we are in a rational, “cold” state, we can autonomously construct our own rigid boundaries and penalties.

Ariely extends this logic of self-imposed constraint to broader societal problems like credit card debt and preventative healthcare. He points to automated mechanisms, like forced 401(k) deductions or self-imposed medical appointment schedules, as necessary tools. True self-determination, the chapter implies, is not the naive belief that we can simply overpower temptation in the moment; it is the strategic foresight to build structures that force our future self to align with our present values.

The Irrationality of Ownership#

Chapter 7 of Predictably Irrational explores the “endowment effect”, a cognitive bias demonstrating that the simple act of ownership fundamentally and instantly alters our perception of value. Ariely argues that we do not evaluate the things we possess objectively; rather, the moment we acquire something, we begin to overvalue it, demanding far more to give it up than we would ever be willing to pay to acquire it in the first place.

To illustrate this irrational inflation, Ariely highlights an experiment involving highly coveted Duke University basketball tickets. He surveyed students who had participated in a lottery for the tickets. The students who did not win, but desperately wanted to attend, were willing to pay an average of about 170$to buy a ticket. However, the students who had won the lottery demanded an astronomical average of 2400$ to sell theirs. The item was exactly the same, and the demographic of the students was identical. The massive disparity in valuation was generated entirely by the arbitrary state of ownership. The buyers looked at the ticket and thought about the other things they could spend that money on, while the sellers looked at the ticket and focused exclusively on the pain of losing the experience.

Ariely identifies 3 core psychological mechanisms driving this behavior:

1. We rapidly fall in love with what we already have, building an emotional attachment to our possessions.
2. We are driven by loss aversion; the psychological pain of losing something we own completely eclipses the anticipated joy of gaining an equivalent amount of money or a replacement item.
3. We suffer from the delusion of shared perspective, falsely assuming that a potential buyer will look at our possession and see the same emotional value and memories we see, rather than just the physical object.

This cognitive trap extends far beyond physical goods into the realm of ideas, opinions, and “virtual ownership.” Ariely points out that trial promotions and thirty-day money-back guarantees exploit this exact vulnerability. Companies know that once we take an item home, we begin to view it as yours, and the pain of returning it will almost always outweigh the financial cost of keeping it. Similarly, when we adopt a particular ideological viewpoint, we take ownership of it, fiercely resisting contradictory evidence because changing our mind feels like a painful loss.

For an individual dedicated to maintaining intellectual and metaphysical autonomy, the endowment effect acts as a powerful, invisible tether. It restricts our freedom to make rational changes in our lives because it weaponizes our own attachments against us. Breaking free from this trap requires a deliberate act of cognitive detachment: we must consciously attempt to view our possessions, our habits, and even our deeply held opinions as if we were a non-attached third party, refusing to let the arbitrary fact of ownership dictate our perception of actual worth.

The Problems of Many Options#

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• “People are beset not by a lack of opportunity, but by a dizzying abundance of it”

- Dan Ariely

Chapter 8 of Predictably Irrational addresses the irrational human obsession with preserving optionality. Ariely argues that we are so psychologically terrified of letting an opportunity vanish that we will actively sabotage our primary goals, wasting massive amounts of time and resources just to keep our options open.

To isolate this behavior, Ariely designed a computer game where students were presented with 3 colored doors: red, blue, and green. Clicking a door entered the room, and subsequent clicks inside that room earned them varying amounts of money. The rational strategy was simple: quickly sample the 3 rooms to find the one with the highest payout, and then spend all remaining clicks in that single room to maximize profit.

However, Ariely introduced a condition: if a door was not clicked for twelve consecutive turns, it permanently vanished from the screen. Faced with the threat of disappearing options, the students’ behavior became entirely irrational. Instead of staying in the highest-paying room, they frantically clicked back and forth between all 3 rooms, sacrificing guaranteed high payouts simply to prevent the inferior doors from closing. Even when Ariely introduced a financial penalty for switching rooms, the participants still bled their own profits dry in a desperate, illogical bid to keep every avenue available.

The psychological driver here is an acute manifestation of loss aversion combined with a deep fear of finality. We are wired to perceive the closing of a door as a definitive, painful loss, even if that door leads somewhere we have no actual desire to go. Consequently, we overvalue the mere potential of an alternative while remaining entirely blind to the heavy toll of maintaining it. In the real world, this manifests as individuals running themselves ragged pursuing multiple career tracks simultaneously, refusing to commit to a romantic partner, or over-enrolling children in countless extracurriculars - all to avoid the psychological sting of a closed path.

For an individual who values metaphysical autonomy and self-determination, the compulsion to keep options open is a dangerous illusion. The prevailing belief is that maximizing options maximizes freedom. In reality, refusing to close doors dilutes focus and paralyzes action, effectively surrendering our trajectory to indecision. Ariely’s experiment proves that true agency is not the ability to wander endlessly between potentials; it is the courage to deliberately shut inferior doors, accept the loss of alternative futures, and consciously commit to a single, chosen path.

The Effect of Expectations#

Chapter 9 of Predictably Irrational demonstrates that our expectations do not merely influence our conscious opinions; they literally dictate our raw sensory experiences. Ariely argues that when we hold a preconceived belief about how something will taste, sound, or feel, our brain physically alters our subjective reality to perfectly align with that expectation.

To prove that knowledge fundamentally changes sensory perception, Ariely conducted an experiment at an MIT pub, offering students a choice between standard commercial beer and a special “MIT Brew” that had a few drops of balsamic vinegar added to it. When students tasted both beers blindly, the vast majority preferred the vinegar-laced brew. However, when a different group of students was informed about the vinegar before the tasting, their expectations hijacked their palates; they unanimously despised the MIT Brew. Crucially, when a third group tasted the beer blindly, decided they liked it, and was then told about the vinegar, their positive opinion remained unchanged. The knowledge only ruined the physical taste if it was introduced prior to the experience, proving that expectations do not just change how we evaluate an event after the fact—they alter the neurological perception of the event as it happens.

This dynamic explains the immense power of branding, presentation, and environmental framing. Ariely shows how serving the exact same coffee in elegant, ambient surroundings rather than simple styrofoam cups causes people to genuinely experience a superior flavor and willingly pay a premium for it. More concerningly, this mechanism extends deeply into human performance through the psychological weight of stereotypes. Ariely cites studies where Asian-American women took a mathematics exam. When the participants were subtly reminded of their Asian heritage before the test, they performed exceptionally well; when they were primed to focus on their female identity, their scores dropped significantly. The external expectation literally dictated their internal cognitive capability in the moment.

For an individual fiercely committed to metaphysical libertarianism and genuine free will, the power of expectation represents a severe vulnerability. If our supposedly objective sensory inputs and cognitive abilities can be entirely rewired by a marketer’s label, a beautiful container, or a societal stereotype, then our foundational grip on reality is highly manipulable. Exercising true autonomy requires a radical, vigilant skepticism toward the presentation of information. It demands that we consciously strip away the packaging, the branding, and the external narratives, forcing ourselves to evaluate the raw, unvarnished substance of the world on our own uncompromised terms.

How Product Price Blindly Affect Expectations#

Chapter 10 of Predictably Irrational explores the intersection of biology, belief, and economics through the placebo effect, demonstrating how the price tag attached to a product or treatment directly dictates its real, physical efficacy. Ariely shows that placebos are not merely psychological tricks; they trigger actual chemical reactions in the brain, such as the release of endorphins or dopamine, driven entirely by expectation and habituated conditioning.

To test whether economic price signals modulate this biological response, Ariely engineered a fake painkiller called “Veladone.” Participants were subjected to mild electric shocks before and after taking Veladone to measure their pain tolerance. When subjects were told that Veladone cost $2.50 per capsule, nearly all of them reported significant pain relief. However, when the researchers told another group that the price had been discounted to just$0.10 per capsule, the drug’s effectiveness plummeted, with only half as many participants experiencing relief. The chemical composition of the pill was identical, which is a harmless vitamin C supplement; yet the lower price point physically diminished its ability to alleviate pain.

Ariely proved that this price-driven placebo effect extends far beyond medicine into everyday consumer performance. In another experiment, subjects drank an energy drink (Sobe Adrenaline Rush) designed to improve mental acuity before solving word puzzles. Participants who purchased the drink at its full retail price solved significantly more puzzles than those who bought the exact same drink at a heavily discounted rate. The subconscious assumption that “discounted goods are inferior” translated directly into reduced cognitive effort and performance.

The ethical dilemmas raised by this phenomenon are profound. While placebos demonstrate the astonishing power of the mind to heal the body, their reliance on high prices forces a conflict between healthcare costs and therapeutic value. If generic or cheaper drugs are perceived as less potent, they may actually perform worse due to reduced consumer expectation.

For an individual pursuing true autonomy and sovereign self-governance, the power of price over placebos exposes a critical cognitive vulnerability. It reveals that our physical sensations, performance, and well-being are routinely hijacked by commercial cues and external value markers. Overcoming this mechanism requires decoupling intrinsic utility from arbitrary price tags—recognizing that the true potential of our focus, performance, and healing originates from internal belief rather than the price tag stamped on a box.

Honesty#

Chapter 11 of Predictably Irrational addresses the nature of human dishonesty, demonstrating that most people do not make a rational cost-benefit calculation before cheating; instead, we cheat up to the precise threshold that yields a benefit without shattering our self-concept as an honest person.

Standard economic theory posits that dishonesty is driven by the rational evaluation of 3 variables:

1. the gain to be made
2. the probability of getting caught, and
3. the expected punishment

To test this model, Ariely conducted an experiment where participants were given a series of simple math matrix puzzles to solve within a short time limit and paid for each correct answer. In the control group, papers were graded directly. In the experimental group, participants shredded their own answer sheets and simply reported their scores to collect their money. If dishonesty were purely a rational calculation of risk, the shredder group would have claimed a perfect score of twenty to maximize payout. Instead, participants consistently inflated their performance by only a small margin - claiming an average of six solved matrices instead of four. They cheated just enough to profit, but kept their fraud small enough to maintain the self-delusion of moral integrity. This range of unpunished, self-deluded dishonesty is what Ariely terms the “fudge factor.”

To explore how to suppress this impulse, Ariely introduced moral priming immediately prior to the test. Before taking the matrix puzzle exam, one group was asked to write down as many of the Ten Commandments as they could remember, while another group listed books they had read in high school. When given the chance to cheat, the group that attempted to recall the Ten Commandments showed zero dishonesty, even among self-identified atheists who could only recall two or three commandments. Similarly, asking participants to sign an honor code statement on the test sheet eliminated cheating entirely, even at universities with no formal honor system.

This reveals that our internal moral compass is passive until actively triggered. When moral boundaries are absent from our immediate environment, our subconscious rationalizes minor infractions. However, introducing a timely moral reminder right at the moment of temptation forces the brain to align its self-concept with its actions, completely collapsing the “fudge factor.”

For an individual striving for authentic self-governance, Chapter 11 shows that integrity is not a static trait, but an active, context-dependent state. Because human nature naturally rationalizes subtle ethical lapses when no one is watching, maintaining true personal alignment requires deliberate self-monitoring and placing moral anchors directly in the paths of our daily decisions.

Honesty in the Context of Money#

Chapter 12 of Predictably Irrational reveals that while people are generally hesitant to steal actual cash, their moral inhibitions drop significantly when dealing with non-monetary items. When money is even one step removed - transformed into tokens, points, expense reports, stock options, or physical objects, our ability to rationalize dishonest behavior increases exponentially.

• The Communal Fridge Experiment: Coke vs. Cash

  Ariely illustrates this phenomenon through a field experiment in MIT communal dorm refrigerators. When he left six packs of Coca-Cola in the fridges, all the cans vanished within 72 hours. However, when he placed plates containing six $1 bills in the exact same fridges, not a single dollar was taken after several days. Stealing a dollar bill directly violates our internal moral identity as an honest person, whereas taking a $1 can of soda is easily rationalized as taking a harmless communal snack.

• The Token Experiment: Doubling the Cheating

  To measure this effect under controlled conditions, Ariely modified the matrix puzzle experiment earlier. In this variation, when participants shredded their answer sheets, they were not paid in direct cash; instead, they were handed plastic tokens for each solved puzzle, which they immediately walked 12 feet across the room to exchange for real cash. This tiny, momentary buffer of a token doubled the amount of cheating. The presence of a non-monetary intermediate completely dissolved the psychological friction against lying, allowing participants to claim far more unearned rewards than when paid directly in cash.

• The Psychological Mechanism: Psychological Distance

  The driver of this behavior is psychological distance. Non-monetary mediums allow our rationalization machinery to operate without constraint. Because we are not physically taking dollar bills out of someone’s wallet, taking home office supplies, inflating expense accounts, or manipulating digital ledger entries does not feel like stealing. The “fudge factor” expands dramatically because non-monetary items allow us to reframe dishonesty as a perk, a rounding error, or a corporate inefficiency, leaving our positive self-concept completely intact.

• Societal Implications in a Cashless World

  This mechanism carries profound consequences for modern society. White-collar financial crime, corporate fraud, and digital accounting tricks involve vast sums of abstract numbers on screens rather than physical bills, making systemic cheating far easier to execute and morally ignore. As global economies move increasingly away from physical currency toward digital transactions, credit points, and abstract financial instruments, society becomes inherently more vulnerable to widespread, low-friction dishonesty.

Maintaining personal integrity in an increasingly digital world requires actively closing the cognitive gap created by non-monetary mediums. True self-determination demands treating electronic figures, tokens, and corporate resources with the exact same moral vigilance as physical cash held in our hand.

Beer and Free Lunches#

Chapter 13 of Predictably Irrational focuses on how social context distorts our choices, demonstrating that when decisions are made in public, we frequently sacrifice our own intrinsic enjoyment to project a desired image to those around us.

Behavior Economics#

The final section of Predictably Irrational synthesizes the central premise of the entire book. Standard economics assumes that individuals are rational and that markets are perfectly efficient, leaving “no free lunch” - meaning every benefit carries an equivalent cost. Behavioral economics, by contrast, proves that humans are predictably irrational, continuously making systematic mistakes due to cognitive biases.

Recognizing these predictable errors creates opportunities for true “free lunches”: by redesigning environments, policies, and choice architectures, we can help people make better decisions (saving more money, eating healthier, or making decisions aligned with their actual preferences) without restricting their freedom or increasing costs.

For an individual seeking sovereign choice, this book is a reminder that human decisions do not occur in a vacuum. To preserve true agency in social environments, whether at a restaurant, in a meeting, or within a cultural group, one must consciously separate genuine internal desires from the invisible pressure to manage how one is perceived by others.

Behavioral economics is a fully established and highly respected branch of academia. It operates squarely at the intersection of 2 scientific disciplines:

1. Economics, and
2. Cognitive Psychology.

While traditional economics is often highly theoretical and mathematically driven, behavioral economics relies heavily on the empirical, experimental methods of psychology to test how humans actually behave in the real world.

The Problem with “Homo Economicus”

For most of the 20th century, standard neoclassical economics was built on a foundational assumption: humans are perfectly rational. Economic models assumed that people—often referred to as Homo economicus (economic man) - always act in their own best interest, process all available information perfectly, and make choices that maximize their “utility” (satisfaction or wealth).

However, as the century progressed, economists and psychologists alike began to notice that real human beings consistently violate these mathematical models. We save too little, eat too much, buy high, sell low, and make choices driven by emotion, fatigue, and social pressure.

The true birth of modern behavioral economics happened in the 1970s, not in an economics department, but through the collaboration of two Israeli cognitive psychologists: Daniel Kahneman and Amos Tversky.

They began running rigorous, repeatable psychological experiments demonstrating that human irrationality is not random, but systemic and predictable (the very premise of Ariely’s book). Their most famous contribution is Prospect Theory, published in 1979. It mathematically mapped out how people make decisions involving risk, proving concepts like “loss aversion” - the psychological phenomenon where losing $100 hurts about twice as much as gaining $100 feels good.

Robert Cialdini’s Influence: The Psychology of Persuasion is a classic work that explores the psychological triggers that cause people to say “yes.” The book’s central argument is that our brains often use mental shortcuts to make decisions quickly. While these shortcuts are usually helpful, they can also be exploited by “compliance practitioners” like salespeople and marketers to persuade us to do things we might not otherwise do.

Cialdini identifies six universal principles of influence:

1. Reciprocation: We feel an obligation to repay favors, gifts, or concessions that have been given to us. This is why a free sample can lead to a purchase or a small gift can create a feeling of indebtedness.
2. Commitment and Consistency: Once we’ve made a public commitment or taken a stand on something, we feel a strong pressure to behave in a way that is consistent with that initial commitment. This principle is often exploited through “foot-in-the-door” tactics, where a small initial request is followed by a larger one.
3. Social Proof
4. Liking
5. Authority
6. Scarcity

NOTE

When we are offered a small gift, mostly likely we are being manipulated. Doing business with people is not about playing Psychological tricks on them, but to genuinely offering values for them

This is a good book that reminds us that persuasion is rooted in building genuine connections

Reciprocation#

Rule for Reciprocation

We should try to repay, in kind, what another person has provided us

Simply put, people are obliged to give back to others the form of a behavior, gift, or service that they have received first. For example, if a friend invites us to their party, there is an obligation for us to invite them to a future party we are hosting. If a colleague does us a favor, then we owe that colleague a favor. And in the context of a social obligation people are more likely to say “yes” to those who they owe.

One of the best demonstrations of the Rule for Reciprocation comes from a series of studies conducted in restaurants. When we visited a restaurant, there is a good chance that the waiter or waitress will have given us a gift. Probably about the same time that they bring your bill. A liqueur, perhaps, or a fortune cookie, or perhaps a simple mint. Does the giving of a mint have any influence over how much tip we are going to leave them? Most people will say “no”. But that mint can make a surprising difference. In the study, giving diners a single mint at the end of their meal typically increased tips by around 3%. Interestingly, if the gift is doubled and two mints are provided, tips don’t double. They quadruple - a 14% increase in tips. But perhaps most interesting of all is the fact that if the waiter provides one mint, starts to walk away from the table, but pauses, turns back and says, “For you nice people, here’s an extra mint,” tips go through the roof. A 23% increase, influenced not by what was given, but how it was given.

TIP

The key to using the Principle of Reciprocity is to be the first to give and to ensure that what we give is personalized and unexpected.

Human societies derive a truly significant competitive advantage from the reciprocity rule, and consequently the political authorities make sure their members are trained to comply with and believe in it. As a result, there is general distaste for those who take but make no effort to give in return, and we will avoid being considered as such persons. It is those attempts of such avoidance that individuals find opportunities to take advantage of on us

Although we all agree that people are more willing to do a favor for someone they like, under the rule of reciprocation, even the relationship between liking and compliance was completely wiped out, demonstrating the overpowering effectiveness of the rule. For those who owed somebody a favor, it made no difference whether they like that person or not; they felt a sense of obligation to repay him.

People we might ordinarily dislike, such as an unwelcome sales operator, disagreeable acquaintances, or even an unpopular organization, can greatly increase the chance that we will do what they wish merely by providing us with a small favor prior to their requests. Such small favor could be the “free sample” in marketing fields, a free book, or even a flower, or even the acceptance of a refusal followed by a smaller compliance request.

One feature of the reciprocity is that a small initial favor can trigger a substantially larger return favor. This is often exploited by manipulators. The reason for us to accept such unfair exchange is that most of us find it highly disagreeable to be in a state of obligation. It weighs heavily on us and demands to be removed. For this reason alone, we may be willing to agree to perform a larger favor than we received, merely to relieve ourselves of the psychological burden of debt.

Commitment and Consistency#

IMPORTANT

Once we have made a choice or taken a stand, we will encounter personal and interpersonal pressures to behave consistently with that commitment

Motivated by the human tendency for continuous commitment, People’s desire for consistency has been a central motivation of our behaviors, because a high degree of consistency is normally associated with personal and intellectual strength while inconsistency is commonly thought to be an undesirable personality trait. It is at the heart of logic, rationality, stability, and honesty.

On the other hand, this highly-valued good personal consistency can be disastrous when it occurs unthinkinly. First, it offers a shortcut through the density of modern life. Once we have made up our minds about an issue, stubborn consistency allows us a very appealing luxury: We really don’t have to think hard about the issue anymore. We need only believe or do whatever is consistent with our earlier decision. We do so the allure of such a luxury allows us a convenient, relatively, effortless, and efficient method for dealing with complex daily environments that make severe demands on our mental energies and capacities. Second, when we are desperately longing for a solution and spot a one that we think should solve the problem, the tendency of becoming consistent pushes us to our comfort zone by ignoring any other rational opposing view. In this case, automatic consistency shields us against any painful yet meaningful thoughts.

Such consistency can also be exploited by those who would prefer that we not think too much in response to their requests for our compliance. The author mentions the example of toy companies’ strategy to boost post-Christmas sales. Normally, people over-spend during Christmas season which resulted in low sales during post-Christmas period. The toy companies did the trick with pre-Christmas TV advertisement that shows attractive Christmas toys for children. The parents would normally promise the advertised toy as Christmas gift for them. But later the toy companies undersupply the stores with these toys and substitute them with other toys of equal values and re-advertise those toys that have gotten the parents to promise. In the end, the toy companies make double-money with the substitutes and the original toys.

The key for this Psychological trick is to trigger an initial commitment that would set the stage for automatic and ill-considered consistence with that initial commitment, which could be invoked by various strategies, including asking people to simply make an oral promise before a call of action (door-to-door charity example)

The initial commitment can be very small. During the war between nations A and B, many captured A soldiers were held in POW camps run by nation C. Instead of the brutality favored by nation B, nation C employed a “lenient policy” that was a sophisticated form of psychological manipulation, relying heavily on the principles of commitment and consistency. The key to their approach was a start-small-and-build strategy.

They would begin by asking prisoners to make small, seemingly harmless statements that were slightly critical of the nation A or favorable to nation C. For example, a prisoner might be asked to agree that “nation A is not perfect.” Once this small commitment was made, C interrogators would gradually push for more significant acts of compliance. This might include:

• Elaborating on their initial statement.
• Writing and signing a list of “problems with Nation A.”
• Reading that list aloud to other prisoners.
• Writing a detailed essay on the topic.

This gradual escalation of requests led many prisoners to collaborate without ever experiencing harsh physical coercion. A prisoner who wrote an essay without being threatened might later rationalize their actions and change their self-perception to be consistent with their deeds, leading to even greater collaboration. As a result of these tactics, a vast majority of nation A POWs collaborated with the enemy in some form, with the Chinese using these seemingly trivial actions to their advantage.

IMPORTANT

The story of POW strongly resonate with Randall L. Bytwerk’s Bending Spines - The Propagandas of Nazi Germany and the German Democratic Republic who states the following in its introduction:

A pastor who lived through the Third Reich described his meetings with Nazi officials in a way that illuminates life in totalitarian societies: “[O]ne would be pushed further, step by step, until he had crossed over the line, without noticing that his spine was being bent millimeter by millimeter.” The Nazis he met with knew that persuasion is a gradual process with many methods.

Bytwerk, in his book, examines how two different totalitarian regimes used propaganda to control their populations and why, despite initial successes, their efforts ultimately failed.

Bytwerk argues that outsiders often make 2 key mistakes when interpreting the propaganda of these regimes. The first is the assumption that it was successful simply because it was backed by a police state and people were afraid not to comply. Bytwerk suggests that while coercion was a factor, such assumption oversimplifies the issue. He corrects this by explaining that totalitarian movements, like Nazism and Marxism-Leninism, presented a persuasive, pseudo-religious worldview that provided a complete explanation for all aspects of life. This holistic ideology gave people a reason to accept the status quo, and the propaganda used a wide range of persuasive techniques beyond fear, from subtle suggestion to overt violence. The second is the belief that propaganda fully persuaded the majority of citizens, leading to a widespread, genuine belief in the regimes’ ideologies. Bytwerk’s correction is that propaganda wasn’t about making people staunch believers; it was about getting them to act as if they were. It created a “hegemonic metanarrative” or a shared public reality that was difficult to challenge.

The book’s central conclusion is that these systems ultimately failed because their propaganda, despite its initial success in bending spines, was unable to deliver on its promises and expected more from people than it could realistically get, leading to a disconnect between the official narrative and the people’s lived reality.

The POW trick has also been widely used in business world and has a dedicated name called foot-in-the-door technique. For the salesperson, the strategy is to obtain a large purchase by starting with a small one. The foot-in-the-door also reveals a much profound effect on our behavior. From the example of keeping California beautiful, the main force that drives the request compliance is the feelings: a person’s feelings about getting involved or taking actions can be changed with such small request and, as a result, will start being consistent with their newly formed self-image. On the exploitation side, this would mean being very careful about agreeing to trivial requests_.

Incrementalism

Those who take one step further from the “foot-in-the-door” and could easily notice a trade-off here:

• We can request a big compliance with a high failure risk, or
• We can request a small compliance with a high success rate but at the expense of longer waiting time used for laying out the bigger request later

This trade-off reveals a principle of risk versus reward, a fundamental concept in Decision Theory, Economics, and Philosophy. It highlights that the potential for a greater reward (securing a larger request immediately) often comes with a higher risk of failure. Conversely, a lower-risk strategy (the “foot-in-the-door” technique with a small initial request) offers a higher chance of success but delays the ultimate goal, requiring patience and a longer-term approach.

The trade-off also touches on the principle of incrementalism, which suggests that change or progress is best achieved through a series of small, manageable steps rather than a single, large leap. In the context of the foot-in-the-door technique, this means that securing a small commitment from a person makes them more likely to agree to a subsequent, larger request. This is because people tend to want to maintain consistency in their behavior and self-perception; having already complied with a small request, they are more likely to see themselves as helpful and agreeable, making them more receptive to the larger request.

Ultimately, this psychological observation reflects the philosophical idea that strategies for achieving a desired outcome must balance the immediate potential for success against the long-term investment of time and resources. It’s a pragmatic application of the idea that a series of small victories can lead to a larger one, and that a guaranteed small gain may be more valuable than a risky large one.

In his video “The Power of Marginal Gains,” Stephen Duneier provides a summary of his book’s core philosophy. He argues that ambitious goals can be achieved not through special talent or skill, but by breaking down large, daunting challenges into small, manageable decisions:

The video is essentially a public presentation of the central ideas found in Stephen Duneier’s book, AlphaBrain: How a Group of Iconoclasts Are Using Cognitive Science to Advance the Business of Alpha Generation, which focuses specifically on applying cognitive science and incremental improvements to the world of investing. The book suggests that achieving significant success is not about finding a single “magic bullet” but rather about a series of small, incremental improvements to one’s decision-making process. The cumulative effect of these small gains can be immense over the long run.

In ethics, incrementalism is often referred to as the “slippery slope.” This concept describes how a series of small, seemingly harmless ethical compromises can gradually lead to a person committing more significant moral transgressions. The slow, subtle nature of the change makes it difficult to recognize when a critical ethical boundary has been crossed. This is the underlying mechanism behind the aforementioned POW tricks. The philosophical principle underlying incrementalism is that gradual and cautious progress is a more effective and stable way to achieve complex change than radical, revolutionary leaps. It’s a pragmatic philosophy that favors adaptation and learning through experience over abstract, all-encompassing theories.

In the world of business, large projects follow some type of strategic planning, there is normally a need to allocate time to plan the project in order to avoid “fire fighting”, in other words the avoidance of time delaying issues. In contrast to other systems of planning such as top down, bottom up, and so on, incrementalism involves concentrating on dealing with the immediate problems as they arrive and avoiding trying to create an overall strategic plan. This means muddling through the issues at hand based on importance.

Strategic implementation is a very well thought out plan of implementation that is the opposite to incrementalism. Although the plan involved with the strategic implementation might work incrementally it has set objectives at set times with little to no intention of muddling through the process. In other words, every part of the implementation would be expected and planned for ahead of time.

Getting to the heart of what a person’s core philosophy means for their professional life, based on a comparison of their respective cultures, an incrementalist/libertarian mindset is generally more suited to a startup environment than a large corporate one. Startups are often described as “speedboats” compared to the “tanker ships” of corporations. Their core characteristics directly align with an incrementalist/libertarian philosophy:

• Agile and Adaptive: Startups must pivot quickly to survive and find product-market fit. This requires an incrementalist approach where strategies are tested, adjusted, and refined in a continuous feedback loop. This is the opposite of a rigid, multi-year plan.
• High Autonomy and Individual Impact: Startups typically have flat hierarchies and fewer layers of management. Employees are given significant autonomy and are expected to wear multiple hats and take ownership. This appeals to the libertarian belief in individual self-determination and freedom of action, where your direct contributions have a visible and immediate impact on the company’s success.
• Risk Tolerance: Startups inherently embrace risk, viewing it as a necessary component of innovation. They are comfortable with making decisions with incomplete information and are not afraid to learn from failure, a core tenet of an incrementalist process.

For someone who aligns with an incrementalist/libertarian philosophy, a startup offers a work environment where their natural inclination toward adaptability, autonomy, and continuous learning is not just tolerated, but actively required for success. In a corporate environment, they can still thrive by acting as an agent of change and a champion for more modern methodologies, but they will likely need to actively navigate and justify their approach to a culture that may favor a different way of working.

It should be noted that not all small request (commitments) affect self-image. Those that are bear certain conditions. What are those conditions? Our best evidence of what people truly feel and believe comes less from their words than from their deeds. Observers trying to decide what a man is like look closely at his actions. The POW trick reveals the following type of acts that can alter the self-image:

• Writ it down: a written declaration provides physical evidence that the act, stating the written belief, occurred. The things that have been written directs one’s self-image. In addition, what’s been written can be shown to others publicly, who have natural tendency to blindly assume that a statement reflects the true attitude of the person who made it. What those around us think is true of us is enormously important in determining what we ourselves think is true. The written statement tactics have also been widely used in business. In conclusion, Commitments are most effective in changing a person’s self-image and future behavior when they are active, public, and effortful.
• Social scientists have determined that we accept inner responsibility for a behavior when we think we have chosen to perform it in the absence of strong outside pressures. A large reward is an example external pressure. It may get us to perform a certain action, but it won’t get us to accept inner responsibility for the act. Consequently, we won’t feel committed to it. The same is true of a strong threat; it may motivate immediate compliance, but it is unlikely to produce long-term commitment.

Business and social affairs do all sorts of tricks to trigger our commitments that produce inner change, such as lowballing in car dealership and public name list in governmental agenda.

Principle of Social Proof#

American public hates canned laughter in television shows. Why, then, is canned laughter so popular with television executives? Experiments have found that the use of canned merriment causes an audience to laugh longer and more often when humorous material is presented and to rate the material as funnier. In addition, some evidence indicates that canned laughter is more effective for poor jokes. Why would we laugh more given the mechanically fabricated merriment? The book answers this question by introducing The Principle of Social Proof (PSP):

The Principle of Social Proof

One way we use to determine what is correct is to find out what other people think is correct

Example of PSP:

• how fast we drive on highway
• how to eat the chicken at a dinner party
• Bartenders often “salt” their tip jars with a few dollar bills at the beginning of the evening to simulate tips left by prior customers and thereby to give the impression that tipping with folding money is proper barroom behavior
• Advertisers list “best-sellers”
• Charity uses incessant listing of donors
• Salesmen are taught to spice their pitches with numerous accounts of individuals who have purchased the product (“Since 95% of the people are imitators and only 5% initiators, people are persuaded more by the action of others tha by any proof we can offer”)

The PSP explains why, on commercial product websites, we see they list companies that are using the products - we see using their products as more appropriate when others are doing the same thing. In the case of canned laughter, we use other’s laugh to help decide what is humorous and when mirth is appropriate. The fact that we laugh based simply on a patently fraudulent laughter shows that people can exploit our preference for shortcuts, our tendency to react automatically on the basis of partial evidence. One example is the aforementioned “cheep-cheep” of baby turkey. The mother turkey gets fooled by the sound because it makes judgements based only on the sound.

Liking#

Liking Rule

We prefer to say yes to the request of someone we know and like

Knowing the power of the liking rule to produce assent, compliance professionals first get us to like them. The following tactics are about getting us to like someone who we don’t know before. Particularly in business such as car dealership, those that are liked by customers tend to acquire more business, sales, and incomes as a result of the former two.

• Physical Attractiveness

  Halo Effects

  A halo effect occurs when one positive characteristic of a person dominates the way that person is viewed by others

  Physical attractiveness triggers halo effect. Without being aware that physical attractiveness plays a role in this process, we automatically assign to good-looking individuals such as favorable traits as talent, kindness, honesty, and intelligence.

  Unsettling research indicates that our judicial process is similarly susceptible to the influences of body dimensions and bone structure. e.g. handsome man received lighter sentences in criminal trials

  Attractive people are more likely to obtain help when in need and are more persuasive in changing the opinions of an audience.

• Similarity

  In addition to physical appearance, we like people who are similar (opinion, personality, background, life-style) to us. For example

  • Dress
  • Interests. A strong example: Car salesmen, for example, are trained to look for evidence of such things while examining the customer’s trade-in. If there is camping gear in the trunk, the salesman might mention, later on, how he loves to get away from the city whenever he can; if there are golf balls on the back seat, he might remark that he hopes the rain will hold off until he can play the eighteen holes he has schedules for later in the day; if he notices that the car was purchased out of state, he might ask where the customer is from and report - with “surprise” - that he (or his wife) was born there, too

• Compliments: We are phenomenal suckers for flatter

  The information that someone fancies us can be a bewitchingly effective device for producing return liking and willing compliance. So, often in terms of flattery or simple claims of affinity, we hear positive estimation from people who want something from us. This reflects a lot of phenomenons in our society:

  • why we see those celebrities give holiday greetings on TV
  • why we see sales people regularly sends us “happy new year” or “I like you” card.

• Familiarity - Contact & Cooperation

  For the most part, we like things that are familiar to us, because Our attitude toward something is influenced by the number of times we have been exposed to it in the past. But this does not apply in all cases (Schooling exception). Hence the concept of “cooperation” is introduced. The concept is illustrated in the following experiment:

  Children are splited into 2 competing groups -> Groups starts to fight against each other triggered by the grouping itself -> cooperation. e.g. combined forces to fix water problem, pull food truck, and renting a movie -> the common goals ended the battles between groups -> they become friends

  It is important to know when cooperation is appropriate because sometimes competition has its place, too. It can serve as a valuable motivator of desirable action and an important builder of self-concept.

  Done with children experiment, the book states that

  1. although the familiarity produced by contact usually leads to greater liking, the opposite occurs if the contact carries distasteful experience with it
  2. the evidence that team-oriented learning is an antidote to this disorder may tell us about the heavy impact of cooperation on the liking process.

  How does all above apply to the persuasion of product buying? Compliance professionals are forever attempting to establish that we and they are working for the same goals, that we must “pull together” for mutual benefit, that they are, in essence, our teammates

_ Conditioning and Association

There is a natural human tendency to dislike a person who brings us unpleasant information, even when that person did not cause the bad news. The simple association with it is enough to stimulate our dislike. Vice Versa - establish connection between product and goodies. Examples include

• Good-looking models standing around car
• Linking of celebrities to products in advertisement
• Congressional representatives traditionally announce to the press the start of federal projects that will bring new jobs or benefits to their home states; this is true even when a representative has had nothing to do with advancing the project or has, in some cases, voted against it
• Luncheon technique - We become fonder of the people and things we experience while we were eating (food is a source of positiveness)
• Pavlov: If the presentation of food to a god was always accompanied by the sound of a bell, soon the dog would salivate to the bell alone, even when there was no food to be had
• Luncheon technique is an application of Pavlov’s experiment: there are many normal responses to food besides salivation, one of them being a good and favorable feeling.

Authority#

How much suffering will ordinary people be willing to inflict on an entirely innocent other person? With a deep-seated sense of duty to authority, we might do everything. We are trained from birth that obedience to proper authority is right and disobedience is wrong.

Religious instruction contributes as well. The very first book of the Bible, for example, describes how failure to obey the ultimate authority produced the loss of paradise for Adam, Eve, and the rest of the human race.

Information from a recognized authority can provide us a valuable shortcut for deciding how to act in a situation. In addition, authority has managed to provide us some initial benefits by obeying them. Once we realize that obedience to authority is mostly rewarding, it is easy to allow ourselves the convenience of automatic obedience. Although such mindless obedience leads us to appropriate action in the great majority of cases, there will be conspicuous exceptions, because ⚠️ we are reacting rather than thinking ⚠️. This unthinking nature of obedience gives compliance professionals another advantage - employing the influence of the authority principle without ever providing a real authority. In most cases, the appearance of influence is just more than enough, because we are often as vulnerable to the symbols of authority as to the substance. Such symbols include:

• Titles

  Beyond its natural effect of authority, size and title (status) is interestingly related because it is possible for certain individuals to benefit by substituting the size for the status. The connection of those two things can be profitably employed by individuals who are able to fake size to gain the appearance of the status.

• Clothes

Scarcity#

Scarcity Principle (SP)

Opportunities seem more valuable to us when their availability is limited

The idea of potential loss plays a large role in human decision-making. People seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value (e.g. homeowners told how much money they could lose from inadequate insulation are more likey to insulate their homes than those told how much money they could save).

A reason that SP works is because as opportunities become less available, we lose freedoms; and we hate to lose the freedoms we already have:

Fundamental of Psychological Reactance Theory

Whenever free choice is limited or threatened, the need to retain our freedoms makes us desire them (as well as the goods and services associated with them) significantly more than previously

Applications of SP includes:

• Limited-Number Tactic

  The customer is informed that a certain product is in short supply that cannot be guaranteed to last long. LN tactic assumes that the things that are difficult to possess are typically better than those that are easy to possess - availability decides on quality.

• Fight for Freedom

  • Romeo and Juliet
  • Cigarette ads via woman rights
  • Visitor purchases gun in gun-free city - people want what has been banned and therefore to presume that it is more worthwhile

Not only do we want the same item more when it is scare, we want it most when we are in competition for it. Examples include “hurry-to-buy” on e-commerce and salespeople fake rich buyer/competitor to indecisive customer