If you think you’re a rational, systematic type of person, I'm sorry but you’re in line for a massive identity crisis.
This book lays down the inherent biases that we all have. If we don’t know we have them, how can we counter them?
I’m sharing some of the biases I have used in my business and life, obviously the book has more, I speak fast but not THAT fast.
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A dollar is not really a dollar.
This is what I call an Ugly Betty on my website. It is the product which is just there to make your low price product look cheaper and your higher priced product look more premium.
The endowment effect
When we own something or create something we place far more value on it than if we did not own or create it.
Just by introducing an element of free, the whole dynamic of a situation is changed. People will choose free over just 4 cents. FOUR CENTS. Imagine free shipping against $5 shipping. It’s just $5 and yet I promise it makes a HUGE difference.
We are driven by social norms. This is basically money vs morality.
One of the examples is when certain lawyers were asked to volunteer to give advice to retirees. A lot of people were open to the idea but when they introduced a low fee people's attitudes changed because now it was a financial situation, not a moral one.
So be careful about introducing money into a situation which is usually moral.
This is one of my favourites. The responsiveness of a well primed person is a thing of beauty.
The example in a book is where people have to take a test which included words associated with rude or aggressive feelings. The other participants took a test with more “normal” words. Completely weirdly the first group were actually more rude and aggressive. Totally weird, totally true.
The experiment mentioned here is where people were given 2 placebo pills one was $2 and the other 2 cents. Of course the people got more relief from the more expensive pill.
This links to the Parity Switch, which you can find out all about here, if you are selling a $200 course in a market where everyone else sells for $2000 unless you tackle that head on, people will assume yours is worse. They just will.
Oh our brains. Such marvellous things. You can get the book here. And this isn’t an affiliate link, the only thing I get if you buy it is an insane ego boost that you’ll do whatever I say!