Key Points

• People are not the rational “homo economus” of classical economics, but they are irrational in predictable ways.
• Most customer comparisons are relative, rather than absolute: you compare something you’re thinking of purchasing with other similar things, rather than judge the features and price in a vacuum.
• Anchoring has large effects on prices.
• “FREE!” has a striking effect on people, causing them to make irrational decisions.
• Social interaction and market interaction are two distinct fields, and mixing them can have unintended consequences.
• People’s emotional state can have a major impact on their decision making process.

Summary

Links

http://www.predictablyirrational.com/