1.Predictably Irrational by Dan Ariely As read by Rob Stokes 29 November 2010

2. Economists expect us to be rational 3. Trouble is we are often not 4. The Truth about Relativity 5. You choose: a) A weekend in Rome with a free breakfast b) A weekend in Paris with a free breakfast 6. You choose: a) A weekend in Rome with a free breakfast b) A weekend in Paris with a free breakfast c) A weekend in Paris without a free breakfast 7. Use relativity to differentiate your offerings 8. As a consumer, benchmark your decisions against a constant factor such as your time 9. The Fallacy of Supply and Demand 10. Anchoring has a major long term effect on our willingness to pay 11. Understand anchoring. Question your repeated behaviour. 12. The Cost of Zero Cost 13. Free doesnt obey market theory 14. After your name, free is the most powerful word. Use it wisely. 15. Use free to trigger behaviour 16. Make sure you dont pay with your time 17. The Cost of Social Norms 18. We are happy to do things, but not when we are paid to do them 19. The fine changed social norms to market norms 20. When a social norm collides with a market norm, the social norm goes away for a long time... 21. The High Price of Ownership 22. 3 Quirks of human nature: 1. We fall in love with what we already have. 2. We focus on what we might lose, rather than what we might gain. 3. We assume that other people will see the transaction from the same perspective as we do. 23. Try and distance yourself from the transaction 24. The Effect of Expectations 25. Beware the stereotype 26. The assumptions people make about your business will influence the way they perceive your product or service 27. The Power of Price 28. If it costs a lot, it must be worth something... 29. The Context of Our Character 30. Given the opportunity, most people are tempted to cheat 31. Particularly when we are not dealing with cash 32. We care about honesty and want to be honest. 33. The problem is that our internal honesty monitor is active only when we contemplate a big transgression. 34. Beer and Free Lunches (or what is behavioural economics) 35. People are sometimes willing to sacrifice the pleasure they get from an experience in order to project a certain image to others 36. We are all far less rational in our decision making than standard economic theory assumes 37. Furthermore, our irrational behaviours are neither random nor senseless - they are systematic and predictable 38. Behavioural economics is based on how people actually behave, not how they would behave if they were rational 39. What did I take out of this? 40. I run a digital marketing agency 41. Biggest lesson: motivating people and the distinction between and market and a social contract 42. Pink: autonomy, mastery and purpose 43. Economics tells you to focus on the money 44. I think the sweet spot is somewhere in between 45. My 2nd gain was as a marketer, both for my clients and my business 46. Understanding what influences consumers to purchase one item over another is a never ending pursuit 47. Behavioural economics teaches us that whilst consumers are often not rational, at least their irrational behaviour can be predicted and therefore better understood. This is the beginning of a journey for me. 48. Thank you Presentation: www.quirk.biz/USB-Ed Quirk textbook: USBtextbook@quirk.biz