The Hidden Forces That Shape Our Decisions

By Dan Ariely

• 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.
• Most people don’t know what they want unless they see it in context.
• We not only tend to compare things with one another but also tend to focus on comparing things that are easily comparable - and avoid comparing things that cannot be compared easily.
• The more we have, the more we want. And the only cure is to break the cycle of relativity.
• Arbitrary coherence - although initial prices are “arbitrary,” once those prices are established in our minds they will shape not only present prices but also future prices (this makes them “coherent”).