Predictably Irrational: The Hidden Forces That Shape Our Decisions

MONEY, AS IT turns out, is very often the most expensive way to motivate people. Social norms are not only cheaper, but often more effective as well.

If people were perfectly rational—if they made decisions solely by crunching the numbers—then subjects would always choose to invest, since the expected overall value on each round is higher if one invests ($1.25, or $2.50 multiplied by the 50 percent chance of getting tails on the coin toss) than if one does not ($1). In fact, if a person invests

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