- Look for decoy choices
- People usually pick the middle choice.
- We need to compare choices to others
- Given 3 choices where 2 are similar, we cannot consider the 3rd choice and instead we pick the better of the 2 like choices
- CEO salaries: 1976 - 36x the average worker. 1993 - 131x the average worker. Regulation was enacted to publish CEO salaries. Now, CEOs make 369x the average worker. Shame didn't occur, instead, envy did.
- Example: A pen costs $25, it is a 15-minute drive to a store where it is $18 so we make the drive. Similarly, a suit costs $455, it is a 15-minute drive to a store where it is $448. Either way is a 15-minute drive to save $7, yet we would only do it relative to the smaller cost.
- Lesson: the more we have, the more we want. Break the cycle of relativity!
A good summary can be found at http://www.todaysten.com/2009/01/book-summary-predictably-irrational.html.