Some random notes I made while reading the book
- Influencing choice: A and B being arbitrary options, creating and providing an additional option A' which is closer but inferior to A, influences people to chose A more often.
- First impression: First impressions count, initial anchors are persistent.
- Endowment effect: People value what they have more while selling, they focus on loosing ownership rather than gaining cash.
- Power of free: Free has great power and appeal. Free falls in a different mental account and is an order of magnitude more powerful than giving away something for cents.
E.g. iPhone Application store: Releasing lite/paid app pair results in higher revenue via paid app download and conversion from free to paid over revenue generated from releasing only paid application.
- Market vs. Social norms: Social norms and market norms often collide, market norm wins.
- Social norms: Social norms are very powerful and can be used instead of market norms in many situations to much better effect in less costly way.
E.g. Motivating employees bonus versus promoting culture of hard work by giving plaques to most hardworking employee.
