Imagine you need to buy a new phone. You go to a shopping centre which has a vast variety of smartphones, offering a range of budget and premium pieces. If you don’t have adequate knowledge or criteria like me, what will you look for in the search? Your approach can be on any parameter – brand affinity, price sensitivity or any other reason. My checklist can include the presence of the internet, a decent camera and a long battery life, though I still don’t know how to assess the last two. Now if your search is complete, how will you finalize it if different companies offer the same facilities? The shopkeeper says that you will get these 10 perks at this price, just by spending marginally more, you will get 14 perks. Chances are you will get tempted by the new offer. You will buy the phone, thinking it is a rational deal. But if you pause for a second, how many perks in a phone you were looking for originally? Will you use those 14 perks? Would you get a better deal if you focused on those 4-5 perks?
Dan Ariely’s book ‘Predictably Irrational’ sheds light on various illogical ways we make decisions, revealing the hidden forces that influence our choices. In the book, Ariely delves into the human tendency to hold onto multiple options, often at a significant cost. The key argument made in the book is that our desire to preserve flexibility can lead to unreasonable decisions and missed opportunities. For example, the availability of a free trial often leads to a reluctance to commit to a paid subscription, even if one is satisfied with the initial trial.
‘Predictably Irrational’ also explains how expectations shape our experiences. It shows how our minds can be primed to perceive things in a particular way. In the world of branding and marketing, companies can significantly impact consumer perception and satisfaction by managing expectations. The book gives insights on the importance of understanding cultural and personal expectations when crafting products or services.
The book doesn’t ask us to leave our biases but makes a solid case for the need to understand them.