Dan Ariely's Predictably Irrational

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Dan Ariely’s second book, Predictably Irrational: The Hidden Forces That Shape Our Decisions, gave readers a wonderful insight into the world of Statistics. The many scenarios explained and analyzed by Dan Ariely in the book changed countless views on identical, confusing, and seemingly unimportant matters. This allowed the readers to see for themselves the extent of statistics’ presence and use in the real world.

I’ll begin with a concept presented by Dan in the very beginning of his book. Chapter 1, The Truth About Relativity, describes how we are often unaware as to how seemingly irrelevant factors such as the simple presentation of options, actually influence what we select. For example, if two options were given, one being A and another A-, most went with the choice of A because A- was more inferior simply to the other choice. Also an experiment was conducted, by Tversky and Kahneman, involving pricing. The first part of the experiment included pens, when contemplating the purchase of a $25 pen, the majority of subjects would drive to another store 15 minutes away to save $7. Looking at the second part of the experiment, choosing a more expensive item, when contemplating the purchase of a $455 suit, the majority of
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When an item is zero/free there is a source of irrational excitement. This is called the "zero price effect." Ariely, Shampanier, and Mazar conducted an experiment using Lindt truffles and Hershey's Kisses. When a truffle was $0.15 and a Kiss was $0.01, 73% of subjects chose the truffle and 27% the Kiss. However, when a truffle was $0.14 and a Kiss was free, 69% chose the kiss and 31% the truffle. Well, why is that? Because Ariely’s experiments had shown that when something is actually "Free" it makes us perceive what is being offered as immensely more valuable than it really