Problem
People judge value based on comparisons that may be irrelevant.
Action
Define clear standards before comparing options.
Outcome
You make more objective decisions.
Chapter: The Truth about Relativity: Why Everything Is Relative - Even When It Shouldn’t Be
Problem
Initial prices can shape beliefs about what something is worth.
Action
Estimate value independently before looking at market prices.
Outcome
You become less influenced by arbitrary anchors.
Chapter: The Fallacy of Supply and Demand: Why the Price of Pearls - and Everything Else - Is Up in the Air
Problem
Free offers can distract from better choices.
Action
Evaluate every option by its total benefit rather than its price alone.
Outcome
You choose what provides the most value.
Chapter: The Cost of Zero Cost: Why We Often Pay Too Much When We Pay Nothing
Problem
Financial rewards can weaken social motivation.
Action
Show gratitude instead of offering small payments for voluntary help.
Outcome
People remain more willing to cooperate.
Chapter: The Cost of Social Norms: Why We Are Happy to Do Things, but Not When We Are Paid to Do Them
Problem
People may feel little connection to a request.
Action
Offer a small, unexpected benefit before asking for help.
Outcome
Others become more willing to contribute.
Chapter: The Power of a Free Cookie: How Free Can Make Us Less Selfish
Problem
Strong emotions can overwhelm good judgment.
Action
Decide in advance how you will act when temptation appears.
Outcome
You make fewer impulsive decisions.
Chapter: The Influence of Arousal: Why Hot Is Much Hotter Than We Realize
Problem
People often fail to act on their intentions.
Action
Use deadlines and consequences to lock in desired behavior.
Outcome
Important tasks are completed more consistently.
Chapter: The Problem of Procrastination and Self-Control: Why We Can’t Make Ourselves Do What We Want to Do
Problem
Ownership causes people to overestimate value.
Action
Ask whether you would buy the item at its current price today.
Outcome
Your judgments become more realistic.
Chapter: The High Price of Ownership: Why We Overvalue What We Have
Problem
Too many open options divide attention.
Action
Let go of alternatives that do not support your main goal.
Outcome
You make faster progress toward what matters most.
Chapter: Keeping Doors Open: Why Options Distract Us from Our Main Objective
Problem
Expectations can distort perception.
Action
Compare what happened with what you expected beforehand.
Outcome
Your evaluations become more accurate.
Chapter: The Effect of Expectations: Why the Mind Gets What It Expects
Problem
Higher prices can create the illusion of better results.
Action
Measure outcomes directly rather than relying on cost.
Outcome
You identify what truly works.
Chapter: The Power of Price: Why a 50-Cent Aspirin Can Do What a Penny Aspirin Can’t
Problem
People distrust messages that appear self-serving.
Action
Check important claims using sources with fewer conflicts of interest.
Outcome
You make decisions with greater confidence.
Chapter: The Cycle of Distrust: Why We Don’t Believe What Marketers Tell Us
Problem
People can justify small acts of dishonesty.
Action
Review personal standards before situations involving temptation.
Outcome
Honest behavior becomes more likely.
Chapter: The Context of Our Character, Part I: Why We Are Dishonest, and What We Can Do about It
Problem
Abstract forms of payment reduce awareness of costs.
Action
Track purchases in ways that highlight how much money is being spent.
Outcome
Financial behavior becomes more responsible.
Chapter: The Context of Our Character, Part II: Why Dealing with Cash Makes Us More Honest
Problem
Many irrational choices stem from predictable biases.
Action
Adjust situations so that good choices become easier to make.
Outcome
You achieve better results with less effort.
Chapter: Beer and Free Lunches: What Is Behavioral Economics, and Where Are the Free Lunches?