Biases and hidden forces that affect our decisions
Neuromarketing and psychology have always fascinated me. Below is a list of books that I enjoyed on this topic over the years.
Predictably Irrational: The Hidden Forces That Shape Our Decisions
Written by Dan Ariely, a Professor of psychology and behavioral economics at Duke University, author and co-founder of several companies implementing insights from behavioral science.
His work focuses on understanding human behavior, decision-making, . Ariely explores how humans are predictably irrational, a key tenet of behavioral economics.
Through scientific experiments and anecdotes, he illustrates various influences on human behavior, such as the lack of an internal meter for evaluating an item’s worth and the tendency to anchor decisions to initial prices. Additionally, Ariely discusses how emotions and social norms impact decision-making.
Priceless: The Hidden Psychology of Value
William Poundstone delves walks your through the fascinating world of pricing and its impact on our decision-making as consumers. You will find out that prices are essentially a collective hallucination. He explores how our perception of value is shaped by various psychological factors, often leading us to make irrational choices. Here are some key ideas from the book:
- Relative Pricing: The most critical factor in pricing isn’t the absolute price of an item but its relative price compared to other options.
- Fairness and Perception: People struggle to estimate “fair” prices accurately. Our unconscious biases, emotions, and social norms play a significant role in how we perceive value. For instance, you would easily pay more for a prestigious brand, even if the quality doesn’t justify the value.
- Strategies Used by Companies: Setting prices is a science! From anchoring (using an initial price as a reference point) to psychological pricing (such as pricing items at $9.99 instead of $10), businesses manipulate our perceptions to maximize profits.
- Behavioral Economics: Poundstone draws on insights from behavioral economics to explain why we fall for pricing tricks. Understanding these mechanisms can empower consumers to make more informed decisions.
Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life
Rory Sutherland takes on an exploration journey of how irrational thinking can lead to remarkable outcomes! Amazing book from the legendary Vice Chairman of Ogilvy.
Irrational Thinking: Sutherland explores how irrationality shapes our decisions. Small changes can lead to big results.
Catering to Outliers: Rather than targeting the average, focus on unique preferences. Embrace the unexpected.
In summary, “Alchemy” encourages us to create magic by understanding human behavior and thinking beyond the norm 🔮.
If you don’t have enough time to go through all of the books above, below is a great summary by Business insider of all the cognitive biases and the hidden forces that make our decisions predictable. These can affect both are personal and professional life!
