A Beginner’s Guide to Irrational Behavior – Dan Ariely – Visual Notes Summary

Posted on March 26th, 2013

Course description based on Dan Ariely’s book:

“Why do our headaches persist after we take a one-cent aspirin but disappear when we take a fifty-cent aspirin? Why do we splurge on a lavish meal but cut coupons to save twenty-five cents on a can of soup? When it comes to making decisions in our lives, we think we’re making smart, rational choices. But are we?

Dan Ariely refutes the common assumption that we behave in fundamentally rational ways. From drinking coffee to losing weight, from buying a car to choosing a romantic partner, we consistently overpay, underestimate, and procrastinate. Yet these misguided behaviors are neither random nor senseless. They’re systematic and predictable—making us predictably irrational.” -  Predictably Irrational - The Hidden Forces That Shape Our Decisions

Coursera - A Beginner’s Guide to Irrational Behavior by Dan Ariely

 

Download over 50 mind maps in a single zip file for free

Learn the most important concepts of irrational behaviour, easily review course material, prepare for the exam, or use them for further research and presentations.

1. Irrationality

  • 1.1 Visual and Decision Illusions
  • 1.2 Defaults
  • 1.3 Do We Know Our Preferences?
  • 1.4 Choice Sets and Relativity
  • 1.5 The Long-lasting Effects of Decisions
  • 1.6 Learning from Our Mistakes
  • Special Guest: Gavan Fitzsimons
  • Special Guest: Eli Finkel (18:31)

Reading Notes

A great law of human action - in order to make a man or a boy covet a thing, it is only necessary to make the thing difficult to attain.”

To craft the most effective policies it is essential that policy makers attend to the meaning people will assign to different actions.

Losses can be fatal but forgone gains can usually be tolerated, the value function slopes down more rapidly for losses than it rises for gains. People are loss averse. The pain of a loss exceeds the pleasure of an equivalent gain.

2. The Psychology of Money

  • 2.1 Opportunity Cost
  • 2.2 Relativity
  • 2.3 The Pain of Paying
  • 2.4 Mental Accounting
  • 2.5 Fairness and Reciprocity
  • 2.6 Loss Aversion and The Endowment Effect
  • 2.7 Market and Social Norms
  • 2.8 The Price of FREE
  • Special Guest: Mike Norton
  • Special Guest: Kathleen Vohs
  • The Psychological Consequences of Money

3. Dishonesty

  • 3.1 The Simple Model of Rational Crime
  • 3.2 Shrinking and Expanding the Fudge Factor
  • 3.3 Conflicts of Interest
  • 3.4 Cheating Over Time and Across Cultures
  • Special Guest: Peter Ubel
  • Special Guest: Nina Mazar
  • Reading: Dishonesty

4. Labor and Motivation

  • Extrinsic versus Intrinsic Motivation
  • Meaning
  • Acknowledgement
  • IKEA Effect
  • Not-Invented-Here Bias
  • Cognitive Dissonance
  • Monetary Stress and Performance
  • Social Stress and Performance
  • Bonuses, Labor and Motivation
  • Special Guest: Lalin Anik
  • Effort for Payment - A Tale of Two Markets
  • Feeling Good About Giving The Benefits (and Costs) of Self-Interested Charitable Behavior
  • Labor and Motivation - A Fine is a Price
  • Large Stakes and Big Mistakes
  • Man’s search for meaning - The case of Legos
  • The ‘IKEA Effect’- When Labor Leads to Love

5. Self-Control

  • Difficulty with Self-Control - Dan Ariely
  • Reward Substitution - Dan Ariely
  • Ulysses Contracts - Dan Ariely
  • The Importance of Self-control - The Individual and the Environment - Dan Ariely
  • Using People’s Biases to do Good - Leslie John
  • Self-Control - How To Get Getter - Hedy Kober
  • A gradient of childhood self-control predicts health, wealth, and public safety
  • Personal Decisions Are the Leading Cause of Death
  • Procrastination, Deadlines, and Performance Self-control
  • Using Behavioral Economics to Increase Employee Saving

6. Emotion

  • 6.1 Two System
  • 6.2 Intra-empathy Mismatch
  • 6.3 The Identifiable Victim Effect
  • 6.4 Emotional Decision Making
  • 6.5 Risk Assessment
  • Special Guest: David Pizarro
  • Special Guest: Peter McGraw

7. Wrapping Up

  • Goodbye from Dan - Final Insights
  • Persuasion - Provincial Norms - Dr. Noah Goldstein
  • Behavioral science and Election Participation - Todd Rogers

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