Sway: The Irresistible Pull of Irrational Behavior

Logic requires that people find universal laws, but outside of scientific fields and once human psychology has a role to play, it is perfectly possible for behavior to become contradictory. A tax rise can cause you to work less because the returns of your labor are lower, or work harder to maintain your present level of disposable wealth. There are... See more

People hate losses (and their Automatic Systems can get pretty emotional about them). Roughly speaking, losing something makes you twice as miserable as gaining the same thing makes you happy. In more technical language, people are "loss averse." How do we know this?Consider a simple experiment.13 Half the students in a class are given co

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previous decisions. Only 22 percent voted for option C, while 78 percent chose option D, the risky strategy. Most doctors were now acting just like Frank: they were rejecting a guaranteed gain in order to participate in a questionable gamble. Of course, this is a ridiculous shift in preference. The two different questions examine identical dilemmas

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announcement was made, she was no longer willing to trade. Endowment effect!” “These negotiations are going nowhere because both sides find it difficult to make concessions, even when they can get something in return. Losses loom larger than gains.” “When they raised their prices, demand dried up.” “He just hates the idea of selling his house for l

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