USB Presentation by Rob Stokes

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

9. Use relativity to differentiate your offerings

11. As a consumer, benchmark your decisions
against a constant factor – such as your time

12. The Fallacy of Supply and Demand

13. Anchoring has a major long term effect on
our willingness to pay

17. Understand anchoring. Question your
repeated behaviour.

18. The Cost of Zero Cost

19. Free doesn’t obey market theory

22. After your name, free is the most powerful
word. Use it wisely.

23. Use free to trigger behaviour

24. Make sure you don’t pay with your time

25. The Cost of Social Norms

26. We are happy to do things, but not when we
are paid to do them

30. The fine changed social norms to market
norms

31. When a social norm collides with a market
norm, the social norm goes away for a long
time...

32. The High Price of Ownership

33. 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.

34. Try and distance yourself from the transaction

35. The Effect of Expectations

37. Beware the stereotype

41. The assumptions people make about your
business will influence the way they
perceive your product or service

42. The Power of Price

43. If it costs a lot, it must be worth something...

45. The Context of Our Character

47. Given the opportunity,
most people are tempted to cheat

48. Particularly when we are not dealing with cash

49. We care about honesty and want to be
honest.

50. The problem is that our internal honesty
monitor is active only when we contemplate
a big transgression.

51. Beer and Free Lunches
(or what is behavioural economics)

53. People are sometimes willing to sacrifice the
pleasure they get from an experience in
order to project a certain image to others

54. We are all far less rational in our decision
making than standard economic theory
assumes

55. Furthermore, our irrational behaviours are
neither random nor senseless - they are
systematic and predictable

56. Behavioural economics is based on how
people actually behave, not how they would
behave if they were rational

57. What did I take out of this?

58. I run a digital marketing agency

59. Biggest lesson: motivating people and the
distinction between and market and a social
contract

60. Pink: autonomy, mastery and purpose

61. Economics tells you to focus on the money

62. I think the sweet spot is somewhere in between

64. My 2nd gain was as a marketer, both for my
clients and my business

65. Understanding what influences consumers to
purchase one item over another is a never
ending pursuit

66. 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.

67. Thank you
Presentation: www.quirk.biz/USB-Ed
Quirk textbook: USBtextbook@quirk.biz