Wednesday, May 21, 2008
"Predictably Irrational " by Dan Ariely
" Let me start with a fundamental observation : most people don't know wht they want unless they see it in context !
We don't know what kind of racing bike we want - until we see the champ in the Tour de France ratcheting the gears on a particular model. We don't know what kind of speaker system we like - until we hear a set of speakers that sounds better than the previous one.
We don't even know, what we want to do with our lives - until we find a relative or a friend who is doing just what we think we should be doing. Everything is relative, and that's the point.
Like an airplane pilot landing in the dark, we want run-way lights on either side of us, guiding us to the place where we can touch down our wheels. Humans rarely choose things in absolute terms. We don't have an internal value meter that tells us how much things are worth. Rather, we focus on the relative advantage of one thing over another, and estimate value accordingly.
For instance, we don't kow how much a six-cylender car is worth, but we can assume it's more expensive than the four-cylender one).
High priced items on the menu boost revenue for the restaurant, even if no one buys them. Why ? Because, even though people generally won't buy the most expensive dish on the menu, they will order the second most expensive dish !! "
Excerpt from " Predictably Irrational " by Dan Ariely.
We don't know what kind of racing bike we want - until we see the champ in the Tour de France ratcheting the gears on a particular model. We don't know what kind of speaker system we like - until we hear a set of speakers that sounds better than the previous one.
We don't even know, what we want to do with our lives - until we find a relative or a friend who is doing just what we think we should be doing. Everything is relative, and that's the point.
Like an airplane pilot landing in the dark, we want run-way lights on either side of us, guiding us to the place where we can touch down our wheels. Humans rarely choose things in absolute terms. We don't have an internal value meter that tells us how much things are worth. Rather, we focus on the relative advantage of one thing over another, and estimate value accordingly.
For instance, we don't kow how much a six-cylender car is worth, but we can assume it's more expensive than the four-cylender one).
High priced items on the menu boost revenue for the restaurant, even if no one buys them. Why ? Because, even though people generally won't buy the most expensive dish on the menu, they will order the second most expensive dish !! "
Excerpt from " Predictably Irrational " by Dan Ariely.
