What dumb decision you made today ?
A book focusing on how we made decision and how we can construct how we present our choice so we could make a better decision, also it explore different bias and through loophole that many marketer and bad influence using to make us do “bad” decision
Firstly we have status quo bias. Whatever we are doing we will just keep doing. The cause if normally just lack of attention. If often applied if an option is designated as “Default” , it will attract a large market share as most people wont even bother to change what set as “default”.
We also get affected by framing, when the choice depend on which problems are stated. Framing work really well because people tend to be somewhat mindless like a passive decision maker.
We also have a thing called dynamically inconsistent , which initial people say they perfer A over B but they later they choose B over A. For example you say you want to do running instead of TV at night, but at night you just sitting in front of TV. The reason behind is there are tempation and mindlessness, or we have “hot state ” vs ” cold state”. Most of us have self control issue because we under-estimate effect of arousel. There are a “planner” and a “doer” in our body, the planner want to promote our long term health and welfare, the doer just want to feel, mischief and long will.
Mental accounting is when an investment pay off, people are willing to take big chances with their “winning”, or in casino they call it “house money” , people are more reckless when they classify the chips as that.
When we talk about social influence, it come into 2 categories, the first one is
- Information – if many people doing something
- Peer pressure – if you care what people think about you
People do think everyone had their eye fixed on them, they even confront to what they think people expect, in reality everybody is only care themselves and the spotlight effect make you feel like you are something. For someone want to construct an choice and to shift behavior, just simply inform people what other doing.
In experiment, there is an “mere-measure” effect, people are asked what they intend to do, they become more likely to act in accordance with their answer. By asking people what they intend to do can be accelerated by ask them when and how they plan to do it.
Basic principle for choice architecture can be summarized as default option – an option that will obtain if choose to do nothing, a large number of people will choose that option. The best way to help human improve is to provide feedback, that’s why a good choice architecture will provide structure and structure will affect outcome.
When we think of proving incentive , the most important question to ask is :
WHO use it ?
WHO choose it ?
WHO pay ?
WHO profits ?
When market get more complicated, unsophisticated and uneducated shopper will be specifically disadvantages by the complexity. Investor have traditionally had trouble distinguishing between past return and forecast of future return. Its a good question to ask when deciding important planning for people, who we be “presumed” consent or “explicit ” consent
Hope you make more good choice after this !
Until Next time