Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions by Dan Ariely

5* Must read again

• Paperback: 384 pages
• Publisher: Harper Perennial; 1 Exp Rev edition (April 27, 2010)
• Language: English
• ISBN-10: 0061353248
• ISBN-13: 978-0061353246

This book is an excellent book. It is not only insightful into human behaviour as a whole but is great for self-reflection to a greater awareness of why we do the things we do. As usual, I try to summarize the learning points after I read this book. You should read it, and re-read it.

1. Anchoring
   We are influence by context even if it can irrational. We compare things in relative terms. This point is great for marketers who want to sway choices. By inserting an anchor, people will form their opinions/expectations around it.
2. Zero - It is not 1 minus 1
   Free as compared to taking an absolute discount off, can tilt decisions dramatically. It has an immense distortion effect. 
3. Social norms has no economic equivalent
   We can be happy to do things for free, but we don't be if we are paid to do the same things. Social exchanges interact at a deeper level and putting any market price to them automatically strips them away. The learning point is to leverage on social exchanges to get the things money can't buy. Give symbolic gifts whenever possible and not the money equivalent.  
4. We possess an unpredictable animal self
   When we are in a state of heightened emotion (be it anger, lust etc) , rationality goes out of the window.
5. Procrastination is normal
   Immediate gratification is the anchor that sways our decisions even though our long term plans are the most rational. To master this, have fixed painful deadlines or have another anchor to sway your decisions to do short-term actions that contribute to long term goals. 
6. We overvalue what we own
   This is due to the emotional attachment to what we have and assign them as unique.
7. Options are not a good thing as they serve as distractions that affects our productivity
8. Expectations are anchors on their own so try to moderate expectations to your benefit
9. Expectations can cause placebo effects
   Preconceived notions like better price equals higher effectiveness works because the mind feeds on itself
10. Tragedy of the commons is everywhere around us - The cycle of distrust
11. Dishonesty is more prevalent than we thought - especially if disassociated from money. We need a moral reminder for us to stay honest.