There are several books on the topic of decision-making, a lot more than I will ever read, but here are a couple of recommendations if the topic is of interest to you.
If you aren’t interested – maybe you should be. “Surprisingly” we are not as rational as we might think. Our feelings, perceptions and mood along with other factors plays a far greater role than we would like them to. In a “perfect” world we would not have two opposing stands on the same topic just because of different wording. Or be “tricked” into making a different choice just because of a simple marketing trick.
Check this example from Predictably Irrational.
The Economist runs a campaign with the following options:
- Internet-only subscription $59
- Print-only subscription $125
- Print-and-Internet subscription $125
Dan Ariely(the author) runs an experiment on 100 students at MIT and this is what they opted for:
- Internet-only subscription $59 – 16 students
- Print-only subscription $125 – 0 students
- Print-and-Internet subscription $125 – 84 students
You would most likely also have chosen the 3. option and with good reason. That seems the best deal. But were you somehow influenced by the mere presence of the Print-only option, which of course no one with a sane mind would choose? If that option did not influence the selection, the removal of it would of course yield somewhat the same spread of selections. He then ran the same experiment, but without the Print-only option and this is how people opted:
- Internet-only $59 – 68 students
- Print-and-Internet $125 – 32 students
If people chose rationally this would of course not be the case, but as the example clearly shows a presence of an option that no one would consider, totally alters the decisions and trust me marketers knows this!
But why do we do this? The “decoy” acts as something to compare option 3 with. We are not sure whether we want internet or print, but with the Print-only option we have a comparison that makes Print-and-Internet a good deal.
This can be deployed by real estate agents trying to sell you a house showing you 3 houses; first one a bit out of town, second one in the city and third another one in the city but who needs some repair done and is in poorer condition than the other house – this would as our example shows, make you more likely to opt in for the good condition city-house. And the applications are numerous; vacations, cars, computers etc.
So if you want to be a bit more aware of how your decisions are shaped and make more rational decisions, you should definitely give one of these books a read. But which one?
How We Decideis by far the one of them who made the least impression on me. Not that it is a bad book, there are some good examples in it, but not just as many “aha” moments or “I could have done that” as in the others. It just did not engage me quite as much as the others. I read it first and found it interesting but with the other options available I would go for one of those.
Predictably Irrational(PI) is by far the most entertaining and engaging. It is so easy to relate to most examples and it is very well written. It is a hard-to-put-down type of book. It is not as thorough as Thinking fast and slow. But if you are not really sure how entertaining it is to read about psychology and your own mind, I would highly recommend to start with Predictably Irrational.
Thinking, Fast and Slowis, as mentioned above, the most thorough. It is not as easy readable as PI in the way that it makes you think so much harder and sometimes presents rather complex theories and ideas. It digs a lot deeper than PI, and has way more material. PI even quotes some of Daniel Kahneman’s discoveries. My recommendation would be to start with PI and if you are hungry for the hardcore stuff go buy Thinking fast and slow. You could read it as your first psychology book on decisions, but then you should be very very curious otherwise it might seem a little to theoretical. PI is an engaging read for almost everyone – Thinking fast and slow is an engaging read if you find the topic engaging I would say.
I am always open to new book recommendations, so please let me know if you have any or if you have comments about the books mentioned.
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