me. So tell me what it’s worth.
You’re probably going to say something between $5 and
$7.
In both cases, it was the exact same mug. All I did was
move the mug in relation to you, and I totally changed its
value.
Or imagine that I offer you $20 to run a three-minute
errand and get me a cup of coffee. You’re going to think to
yourself that $20 for three minutes is $400 an hour. You’re
going to be thrilled.
What if then you find out that by getting you to run that
errand I made a million dollars. You’d go from being
ecstatic for making $400 an hour to being angry because
you got ripped off.
The value of the $20, just like the value of the coffee
mug, didn’t change. But your perspective of it did. Just by
how I position the $20, I can make you happy or disgusted
by it.
I tell you that not to expose our decision making as
emotional and irrational. We’ve already seen that. What I
am saying is that while our decisions may be largely
irrational, that doesn’t mean there aren’t consistent patterns,
principles, and rules behind how we act. And once you
know those mental patterns, you start to see ways to
influence them.
By far the best theory for describing the principles of our
irrational decisions is something called Prospect Theory.
Created in 1979 by the psychologists Daniel Kahneman and
darren dugan
(Darren Dugan)
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