Email me the expanded edition of PI!
Jun
30
A few people purchased the original version of Predictably Irrational since it came out in February 2008.
Now that the expanded edition is out, it seemed to me that the right thing would be to get the extra material to those who have purchased the book already. After discussing this idea with HarperCollins, my publisher, we decided to try an honor system for distributing the extra material.
So — if you purchased the original version of Predictably Irrational and you want the extra material, please email piexpanded@gmail.com and we will email you back the added information in 3 PDFs (a new introduction, added material about the original chapters, and reflections about the financial markets).
Irrationally yours
Dan
This sounds like an experiment in the works!!
Great idea! Just like using ‘Update’ on your computer
And you’re not risking much anyway since the updates alone don’t make the whole book, right?
I’m not sure about the honor element though since even if people who didn’t buy the book will mail you they won’t have the whole book in the end.
Wouldn’t it rather be a honor system if you’d offer the whole updated book as a PDF and the people could then donate money to you if they liked the book? (I’m not recommending this because it probably wouldn’t work in your favor … Personally I still like reading real books instead of printed out PDFs).
But why not offer the first chapter as a PDF to get people hooked and make them buy the book then?
Great idea! Just like using ‘Update’ on your computer
And you’re not risking much anyway since the updates alone don’t make the whole book, right?
I’m not sure about the honor element though since even if people who didn’t buy the book will mail you they won’t have the whole book in the end.
Wouldn’t it rather be a honor system if you’d offer the whole updated book as a PDF and the people could then donate money to you if they liked the book? (I’m not recommending this because it probably wouldn’t work in your favor … Personally I still like reading real books instead of printed out PDFs).
But why not offer the first chapter as a PDF to get people hooked and make them buy the book then?
this is better than nothing, and i dont want to sound ungrateful, because im not. its actually a lot more than i expected (which was precisely nothing)…
but for those of us that bought the e-book (kindle) version, this just seems silly. why not leverage one of the primary benefits of e-books and *update the e-book* instead? for amazon at least, i know this is doable, because ive seen other kindle books i own get revised/updated/corrected…
either way, thanks for making the additional material available, hopefully this is something we’ll see more publishers do in the future to support their best customers (the ones that buy at release and pay full price)…
That is pretty sweet. I just realized π (pi) is a predictably irrational number!
Hi! Great initiative!
I’ve discovered PI through the blog post of Steve Yegge talking about it (http://steve-yegge.blogspot.com/2009/04/have-you-ever-legalized-marijuana.html), and some days later I had the great luck of finding a hardcover copy of it in the bookstore. I’ve actually paid a kind of high price for it (85 reais ~= 43 dollars) probably because of importation taxes (I live in Florianopolis – Brazil).
So, the question is: while I’m very curious about the new version, why do I feel like I would have to prove it to you that I actually bought it, and feel kind of guilty of wanting to ask it, even recognizing I have the previous version and would be doing nothing wrong?
Great Idea Dan! Thanks. We purchased this book as course reader (UCSD Rady school) and I am pleasantly surprised by this completely irrational good thing you are doing
And I had not realized PI=> π => Predictably Irrational connection ! Thanks Geoff for pointing it out.
Thanks a bunch.
I do second radio_babylon’s comment about updating the Kindle edition thru Amazon. That would be sweet.
I loved the book and hope to share some of your insights with my students, but I will give you the credit! However, I noticed in the NYTimes Science times 6/30/09 it seems like your book is cited w/o credit.
Dan
This is consistently irrational. I love it. These examples are very welcomed.
I want to buy this, thanks for your info
a wonderful idea, still i shall buy the new edition…..
Dear Dan
Your book ‘Predictably Irrational’ is pleasure to read. I am glad to read that real economics in the tradition of Joe Schumpeter and Thorstein Veblen is not dead. Your insights will live on, the bankruptcy and limitations of traditionally taught economics have been exposed by the current recession. Thank you.
Dan, this is wonderfully generous of you, and I thank you for sharing updates with those of us who purchased (and vastly enjoyed) the original edition. But I can’t help but wonder…in requesting the expanded edition, am I participating in a some kind of experiment in behavioral economics?
Dan,
Assuming that this blog is the only place where piexpanded@gmail.com is advertised, would it be farfetched to assume that most (not all) of the people who find out about this blog have bought your book >> and they follow your blog >> so they emailed you?
Also, if you don’t mind, I would like to know how many people emailed you asking for the extra material. Maybe you could post it on your blog.
Another thought..
I just received the extra material, which includes a note at the end of the email:
“P.S. Please don’t distribute these files to anyone else. You’re under
honor code!”
Wouldn’t it be more beneficial if we actually forwarded this extra material to other people? Maybe this could serve as a teaser for them to buy the book (assuming they like the extra material), similar to what a trailer does for a movie.
I bought the expanded version with the updates and it’s worth it. Dan talks about some of the events in the economy since the publishing of the original book and shares his insight on what we can learn from it. There are some more anecdotes and the theories are applied to some more real world situations and issues.
I r?ad your interesting book on loan from the Brookline (Ma) library. Is it appropriate for me to download the additions.
Please reply
Thanks for making the extra material available. I mistakenly bought the original version just weeks before the new one came out.
I loaned the original version to a friend. When I received the new material, I thought about the honor code and I decided it was ok to forwarded to the friend I loaned the book to. I’m still debating as to whether or not this was ethical. For some reason it seemed ok to send it to him, but it wouldn’t seem ok to send it to someone else. Another thought – - does it make a difference that person I loaned the book with does not live with me? Is it different than if two people who lived in the same house both read the same original book and read the same e-mailed PDF files?
Please feel free to pass this email address (piexpanded@gmail.com) to anyone who purchased the book — and if they will email me they too will get the additional material.
As for people who did not buy the book — this is more complex and I am leaving this to your judgment.
Irrationally yours
Dan
Dear Professor Ariely,
I just bought your book tonight at Barnes & Noble at Somerset Shopping Center 319 Route 202/206 Bridgewater, NJ 08807
It is very rare because I seldom bought book as my Jewish colleague at Murray Hill Bell Labs told me it is better to eat at Chinese restaurant than buying a book.
I came across your book by accident. I went to BN as usual when nothing to do and read some magazine. Tonight, Harvard Business Review happened to caught my eye, and this BN I seldom came has nice sofa, so I sit and read.
I was not sure which article to pick, so I use my Berkeley CS Algorithm professor Manuel Blum’s tip that he said he learned from his graduate student and turned out to be the most effective algorithm. Just open the magazine and which ever pops up, and just read.
There comes YOUR article.
I read it and showed it to my son who also got admitted to UC Berkeley and planning to obtain Nobel Prize. He chose to follow Milton Friedman’s path to obtain Nobel Economic Prize so chose to go to Rutgers University where he was alumni in 1932 and went thru the Great Depresion.
Anyway, my son brought me YOUR BOOK.
In the past, Nobel Economics Prize often given to Economics who are Mathematician, even Milton Friedman was originally majored in Math and want to be Actury.
But, as I told my son, in the future, Nobel Economics Prize will be given to Economics who are good at Psychology, Neuroscience, Computer Science.
I feel your observation and experiment is very close to that level, and I would NOT be surprised you may get a chance, but one part you are missing, maybe, Computer Science.
In particular, you may want to study Operating System, and you may find an exciting part that your book and research lack of.
One easy analog I can see is that “honesty” is like “real memory” in computer system (or economic system or just any system), and “dishonesty” or “virtual” is like “virtual memory”" in the system.
If you or any economist has complete understanding of this part, you will find that “virtual memory” or “virtual system” or “dishonest” is always NEEDED and gives enormous more power than “real” or “honesty”
However, the difficult part is called “page fault”, i.e. you system may be running 99% great and good, but at that very small part can “collapsed” or “degenerated”.
And, that was what have happened in 2008, the housing issue. I personally believe the problem is “Section 8″ did NOT have complete mechanism or NOT used, or there could NOT have any housing problem.
In general, when that 1% page fault happened, computer system has all kinds of way to deal with it, and I think Section 8 is the way to deal with it in housing. i.e. when that small % of homeowners can not pay mortgage on time, the bank should report to HUD and Section 8 social worker comes in and kick in to assistance.
Just like if a kid sent to hospital with abused evidence, medical doctor or nurse will report to police or child protection agency to intervine.
In summary, housing will ALWAYS with mortgage and will ALWAYS “virtual system”, and will always have “page fault”, and all it takes to fix is fix the law to have HUD Section 8 kicked in automatically.
If they do this, Rational Economics still valid in housing; however, Behavior Economics is a fact and will have MORE inventions to impact Economic System like “virus” that always have NEW form evolved.
Cheng
So, Professor Ariely, why would not buy your book? It is also a coincedence.
1. I read your bottom cover that was recommended by two UC Berkeley Professors who won Nobel Economics Prize.
2. While I did not have time to read your book at BN, I took a look at your chapter title at last 5 minutes before store closed, and one caught my eye. “Why Dealing with Cash Makes Us More Honest.” And, as you may not know, I may be very few who only deal with cash. True, I am very honest, but it was also because I am afraid that when I become “virtual” I can created too huge of an power.
3. The real reason that made me decide to buy your book is, in fact, I got and “extra value” today on the road.
As you may not know that I had an experiment to turn a “bad town” to be Top 100 Best Place to Live in America by simply “picking the trash on the roadside”.
That experiment turned out to be so successful, eventually, township patched all the potholes, and repave the road, and state renovate the highways …etc, and of course, thousands of houses in town and around all sold.
I have not picked up trashes for a while because there are NOT much to pick any more, but I did today.
I passed a for sale house that had lots of “unwanted items” at sidewalk, and my wife found the fantasy of a complete set of fine china. So, it kicks into my “virtual banking account” extra balance.
It is very bad when people do not have money, but it is equally bad when people got lots of extra money or “assets” if you will. You shall know when you got Nobel Economics Award someday.
All of a sudden, you will find you are “short of time” to deal with them. So, the best way is to “spend” them.
So, one part of the money that I had to spend was used to buy YOUR BOOK. And, others I did was to had a nice dinner and concert with family, and will also do many other spending.
And, you will be surprised that Economics will be UP just for my “unexpected spending” because I am so good at “virtual system”.
For example, your book will be read by all of my family before July 14 when it will be sent to my sister in California at Birthday gift, who happened to be Top 5 realtors in CA and going to Peijing University for Economics and just finished her EMBA at Tsing Hua Univ.
And, she happened to be the “impluse leaders” of Chinese millionaires community.
If you also agree Harvard study that “happieness”, “obesity”, … etc can propagated like throwing a stone into the lake, you will understand the power of your book in the right hand. Btw, that theory also explain your “dishonest propagation”.
On thing Harvard professor did not realize, maybe because he only had MD and Sociology Ph.D and lack of Computer Science background, is that the “propagation” can be as fast as “real time”.
In the Network Algorithm and Graph Theory, if each person know 200 people, just 6 indirection can reach all human beings in the earth, and, as you know, the power of email of Web 1.0 and Facebook of Web 2.0.
Basically, what I want to say is that “funding” of buying your book came from “trash”. And, while GDP is often “on the table”, counting with US Dollars, lots of “under table” economics activities are NOT counted.
Of course, one’s trash may be others treasure. e.g. I used to give my tenant a King Size bed and that make him loyal to me for many years, but that bed is what I found on the lawn of my neighbor that night after I signed the lease and turned over my condo.
I told my son, we got to bring this king size bed to this tenant family with a kid immediately, otherwise, that bed will be wet overnight and destroyed and lost value. So, we place it on top of the car and drove to my tenant.
They were so surprised since they got no bed and was planning to sleep on the floor for a while. So, I turn ones trash to another ones treasure, and I am “pivoting” like “Linear Programming” does.
Now, I am pivoting YOUR BOOK from a trashed china set to start with, and let’s see how much “fortune” we can generate to inject into current economic system.
Ok, I am done with your book on introduction and going to start on Chapter One. I already found the fantasy of your book.
How? Because I typed to fast and the programs I triggers far more than normal computer users. So, my supercomputer often “overheat” and died. How many people you know open hundreds of windows on screen constantly?
Now, I found, I can read you book while on computer, “multiplexed”, of course, while eating. Of course, while google and bing you and who you mentioned in the book.
Since you mentioned Seizure, I would like to share with you a way to cure seizure that no neuro science doctors knows yet.
This came from acupuncture. My father is great acupuncturist who often told me to write to SF Mayor Diane Fanstein, not senator, when I was at Berkeley that he could cure all drug addict in ONE treatment.
How? You need to “catch the moment” when that drug addict patient’s addition comes. e.g. if the patient will need drug, say, on 10am, my father will tell him to come at 9am, and set up everything to “wait and catch” that “ghost”. Just like the police will catch a burglar at the “right time” and “right place”, and no more burglary.
I have found “seizure” is the same. You need to catch the “seizure” at the right moment, and once you catch it and cure it, it is GONE forever!
I happened to fount this trick is because that how Unix System Administrator will kill some unwanted deamon process on the system. If you do NOT catch and kill the process at the right time it shows up, you NEVER kill them, and it will recur again and again.
This is the same thing in Economics.
Great offer – I’ll be e-mailing in.
More FREE stuff from Dan is available on http://www.ted.com – he’s got two TED talks at the moment, both awesome.
And while his books are great, the talks give the added advantage of being able to see him and listen to his voice which is like melting chocolate – mmmm.
Dear Professor Ariely,
I just finished your “Relativity”, and I have to say it is great! and, of course, I am good at it, and I have to say you can NOT catch it. How can you catch a “running virtual memory”?
And I have been using it to “sell houses”, and, believe or not, that’s how I made realtors like Ching to become Gold medal winners of 2006, 2007 and 2008, now the top realtor in NJ. Yes, you have to sell more than $10 millions to be gold medal. But, isn’t that housing market collapsed? WRONG! not if you do not know how to do.
If you or your lucky readers happened to read this, here is the tips that can help you to sold out all the houses in your community. “relativity”. And, who knows, if you add this to your next version of the book, maybe you can save the US housing market…
What I do is very simple. For example, if you have a 2br 2ba condo for sale in the community, all you need to do is get a listing of all 2br 2ba condo for sale in the community, and start advertising free for your competitors.
You will get the HIGHEST 3 2br 2ba condos in your community to the media or print them flyers and circulate to the community or prospective buyer community.
Then you will have an open house of yours and with “lower price”, not need to be too low, just a bid lower than the 3 highest ones that the general buyer community know.
Guess what, yours will be sold at the day!
I have done a real experiment, and I was able to get a whole community SOLD OUT. The trick is to sell “the highest priced 3 units”, and once those highest sold, the rest, according to your “relativity theory” would be “cheaper”, and buyers flood in to buy them out.
For example, I got $329k, $325k and $319k sold under contract, then $315k, $309k and $299k became very good deal, and, followed by $294k, $289k, $279k, … all the way to the lowest $254k and $259k units.
Can you believe, dozens of units in a community can be sold out in just a few weeks during current market?
Dear Professor Areily,
Now, I finished your Chapter 2, Demand and Supply, or better “Anchoring and Imprint”. That is fantastic and I have been using them for past dozens years without have a good name of the theory.
If you ever visit NJ, come to our brand new huge East Manor Japanese Seafood buffet restaurant on Stelton Rd near Fwy 287, you shall find your Chapter 2 principles and maybe some of the Chapter 3 Zero cost are applied completely.
That’s why during current economy situation, we dare to grand open a 1,000 seat luxury Japanese Seafood Buffet restaurant, and it is open TODAY (July 4, 2009).
You shall see that the “anchor” price of customer willing to pay for to start with because it is like Starbuck that we provide so many NEW items and experience that NEVER seen anywhere else, and what we do is have all the parties to start with so that “someone else” to set future customer’s “anchor price”.
I have my son to hold a huge Graduation Party in the restaurant inviting 500 of all his classmates and friends and friends friends in high school and neighbors thru his huge Facebook contact. Yes, anyone on his facebook will get the “Invitation” and “FREE” (can’t resisit, huh? in your Chapter 3).
When many of them came for a wonderful party at all you can eat Japanese Seafood Buffet at the first day, they shall all find out the “price” that they saved and that “anchor” them on this restaurant.
Of course, our cost is far below 50% of the price we set; it should be about only 1/3 and that’s why, as you may guess, most restaurants only report about 1/3 of their revenue to IRS so that they shall appear either not making money or make little.
I will run the parties “on behave of third party” also set the “imprint” making that “if you are going to have a serious huge first glass party, you should come here.”
Of course, we shall make the “party price” CHEAPER than “retail price” (unusual, huh?). So, if you go individual, you may pay $30 for dinner $18 for lunch, but if you book a party of, say, 50 people, each person will only be $20 dinner and lunch $12. We call this “wholesale price”.
So, when that come to your Chapter One “relativity”, customers will have a great comparison. You shall see many old customers start organizing “parties” to visit our wonderful luxury Japanese Seafood Buffet restaurant.
Frankly speaking, when you have party, either lunch or dinner, you may find people will “talk more” and eat less, so better price should also make real sense.
Great! I finished Chapter 3, the magic of FREE!! Before my kids going to head to a free swimming pool party at 5pm, and will be followed by a Free July 4 Celebration with FREE foods, drinks, shows, exhibits …etc and 9:30pm a FREE fireworks.
What you said is totally correct, and that is going to be followed by your Chapter 4 Social Norm and Market Norm.
Your suggest on FREE on “good causes” and events government should encourage, frankly speaking conincide my proposal to have FREE Garden State Parkway in NJ dozen years ago. i.e. remove all the toll booth. It has not all come true, but it does remove some tool booth at the cost of others paying HIGHER, but overall will be much cost effective, i.e. reduce the “dead weight loss”
One observation is that American is heading toward Communism while China is heading Capitalism. In Chinese Feng Suei, you pull the drowning guy out of water, and he will pull you into the water, YOU EXCHANGE THE FAITH.
Now, the NEW communism is different from the old one is that old one use “violence” to take over the wealth of the rich. The NEW Communism is NOT. The new one will use peaceful power of FREE!!!
Yes, the power of your Chapter 3 “FREE!”
For example, the free concerts, parties, fireworks came from donations of the rich and companies that generates the enormous welfare by the power of the FREE.
Not far away, Durham Woods Apt provides 3 month FREE rent because Obama provides $8,000 FREE tax credit to first time buyers and that makes Durhame Woods lost hundreds of matured tenants (or first time buyers) to neighbor Village Pointe at Edison, which is almost SOLD OUT.
So, the FREE has some magic power in your Chapter 3, but you will see “tax credit” or just any kind of “credit” seem to have even more power that just FREE. (I guess, you may include the “negative cost” into your next version of the book.
I think that’s similar to the power of “negative income tax” Milton Friedman proposed, now in form of “tax credit”, and is to be the solution to bring us out of current economic situation. So, I believe this 1976 Nobel Economic Prize winner and Rutgers University “32 alumni should be revisit.
And, I wrote to President McCormick to rename Rutgers Economics Dept building New Jersey Hall to be Milton Friedman Hall, and sponsor series of Nobel Prize level talk at Rutgers University, when Nobel Prize Economic Scholars should be invited, and, of course, I would certainly nominate you.
If you look at the basic arithmatic, we got natural number and zero (FREE), but then we also go “negative number” to make the integer operation complete. So, if wealth people pay tax, pay postive income tax, and some people qualified to pay “zero tax”, then, it got to be others to pay “negative tax” to make the economic system complete.
So, we pay “positive registration fee” for our car, whereas you proposed some pay “zero registration fee” for, say, hybrid cars, if government encourage that. Don’t you think Milton Friedman much more clever to have those people pay “negative registration fee” ? So, now you got $4,500 tax credit (negative tax) to encourage this.
So, through out your book, even small as 1 cent, 2 cents or 3 cents, they are “positive cost” and that seem to act about the same, where is “zero” is NOT positive number, but you also should include the “negative cost” to your experiment.
For example, I did not for those who come to a gas station to get just $5 gas, I would give them $5 reimbursement. (this is negative cost) of the gas. Do you know the enormous impact? All of a sudden, many designated gas station has lots of $5 customers, and gas company computers got triggered, and the gas price dropped because their computer think many consumers can NO LONGER bear with the high gas price.
So, try to ask your MIT students to get a coffee and it will not only be free, you will also give them 25 cents coin, see what would happen. It’s like in the house, father encourage the kids to eat some healthy vegetable or drink the milk, you got $1 bill.
Cheng,
You seem to have discovered ‘the truth’ or you just have too much free time
Dan,
I am enjoying your book very much. I especially like the chapter on “The Context of our Character” and what a difference it makes when the 10 Commandments are recalled. If not remembered, this could be the downfall of the U.S. as we know it; however, I wanted to mention one thing and I’ve prayed as to whether I should even mention it. It appears to me that the 10th Commandment was split into two Commandments at the end of the chapter, and the 2nd Commandment was left out altogether. Perhaps a publishing error. I read the NIV version of the bible and have checked both Deuteronomy and Exodus. I discovered this because I wrote down the 10 Commandments as you suggested and was able to list all 10, not in proper order though… Bummer. I just thought you might want to know. Anyway, thanks for the book. It is a pleasure to read.
Dear Professor Areily,
I found this “Social norm” and “market norm” very precise and powerful in your 4th chapter.
As a landlord, how would I keep the “social norm” with my tenant? It is pretty simple. I do NOT increase rent, and I always told my tenants that I am just the “middle man” and I made no money on their rent.
I just help them pay the mortgage, condo fee, property tax, …etc.
Even better, I help them to pick the paint they like so that they can paint the condo wall “for themselves” easily. I told them they can keep the cost down.
After 911, I had a Middle East student, and as soon as I saw his father, I told him you looked like my good old friend, so I do not need to do credit check on you, and I will never increase the rent as long as your son stay here.
It is unbelivable that he replace brand new kitchen floor for his only son and paint the whole condo to make him feel great.
3 years passed, his son graduated from Rutgers University and went to NYU Medical School and still live here commute to NYC for yet another 3 years till going to Standford Univ Hospital for intern.
When he moved, the father replaced all new appliances for me, new stove, new dish/washer, new refrig.
That was an never heard experience just because I treat his son like my son and treat him like my good old friend.
But, then where is the “market norm”? While my tenant there, I would provide brand new sofa set, dinning set, bed set, whatever they would need, the big item that hard to move in and out. And, even better, I let them reimbursed, i.e. they can buy and deducted from the rent.
Do you charge your children for a bed or computer or tv they need? No!
I have found I am probably one of the most successful landlord in this country. My tenants called me “The best landlord in the world!” when I receive their thank you card after I sent them $200 Macy’s gift certificate for Xmas.
But, I lost all my “social norm” with my friends after I helped homeless; I helped hundreds of thousands of homeless in this country, one on one. I lost all my friends when I asked them to help, and they did, and then they disappeared.
I did not understand why but after reading your “social norm” and “market norm”, I seem to understand better.
When I asked my friend to be volunteer to help homeless, they are happy, but when it comes to the real need such as come out one month rent or security deposit to help homeless family move off homelessness; they paid but then gone forever.
I guess that may be because it changed from “social norm” volunteer for writing emails, chatting, …etc to yahoo group. (I set up one yahoo support group for each homeless family and invite my friends, relatives, families …etc to join from all over the place to help the family.)
But, when it came to the point the homeless families need real help like a car, a month rent, help pay utility bill, water bill, …etc. that seemed to become “market norm”, and many just gone.
Yes, S, I have discovered lots of “truth” from all over the places, now, in specific from Professor Areily’s book.
Also, I got “too much of FREE storage”, as you can see that I am not only store my information here in this blog, I also store in other places http://scaryreasoner.wordpress.com/2009/05/15/an-essay-in-nature-about-free-will/
On the one hand, Professor Areily’s Chapter 3 on “FREE” is perfectly explain this. I am normal human, and my brain is gear to FREE items, and since it is FREE to post and use the storage here, why NOT post? Can you tell me a better place to store my study notes about Professor Areily’s book?
Ok, for a good storage, it has to be FREE! and, of course, easy retrieve. Don’t you realize I can always google the book name to retrive my study notes about the book? Even better, when I recommend Professor Areily’s book to my students at Princeton Univerity or Rutgers University, I can just tell them to google the book name, and they shall also get all my study notes.
So, now you know why I got lots of “free time”. It is because I am very powerful in communication and economics.
Have you ever met or heard any Economist or just any scholar who store all their info over Internet? NOT on their PC? And, yet can always perform “random access”?
This whole technology is called “Neuronetwork storage”. This is very different from Vonuman Machine that current computers based on. It makes you or just every one to retrive info difficult. Or, “the more FREE info obtained, the harder to retrive them.”
But, have you ever realized when you ask a human being, like Professor Areily, after his talk, you can ask anything he knows, and if he can not answer, you know he does not know.
My technology is now Web 3.5 where as most people are still in Web 1.0 (emails, websites, …etc) and some in Web 2.0 (blogs, facebook, google, …etc).
———————————————
S
Cheng,
You seem to have discovered ‘the truth’ or you just have too much free time
This is great stuff Dan!! Now I wont have to sift through the expanded version at the Bookstore
Loved the book btw..
Great, Professor Areily, I have finished your Chapter 5 about Hot too Hot. Well, since your experiment done at Berkeley when I went, I can tell you that your 25 students chosen is NOT top students at Berkeley. Why?
Top students like myself, straight A at Berkeley, NEVER went to Sproul Hall, where you placed your recruitment ads, not to mention seen by them.
So, your experiment data may be true but not general, at least, not that I am familiar with as Berkeley student.
But, I do appreciate your drunk driving data about 40% more accident for teenager driver, and one more teen in car will have double the accident rate, …etc.
So, as parents, we go by “limit” number of teens in the car, and limit the “distance” they can go to start with.
Even better, I sat next to my son driving to Rutgers University every day, so that he can drive, and when arrive, he can go to class on time, and I can find parking for him.
In the weekend, he can drive to Princeton University and student there as well and be safe.
Using the term of your Chapter 5, I make sure they always at cool state. e.g. we do not drink, nor smoke, so none of my kids drink or smoke, it is impossible to have drunk driving.
However, we also drive very defensively, e.g. we do not stay around at university area during weekends that college kids may be drunk driving. Princeton University library open till 2am and that’s time we will leave and hit the road when there were very few car, and drunk drivers all went home.
Professor Areily, you may want to add one more experiment into this chapter or another brand new chapter, say, “Hot, getting your grade Better”.
e.g. in the summer, I got all my sons and their friends and girls …etc all go to study at Rutgers Univ library, and you know what? their grades improved a lot! Their team got #1 in FBLA competition in NJ, and later got National #1 in FBLA competition in Anaheim CA.
Dear Professor Areily, I am reading your Chapter 6 on “Procrastination” and I found it gives lots of reasons why people need “deadline” and therefore “schedules” which are in fact “lots of deadlines or check points” thru out the life span.
When I was at Berkeley, computer science courses always gives two week deadline to turn in the program, but I always finish in just one or two days, and turn in. Of course, I got no grade advantage by turning in early, yet, I got disadvantage to refine my program, should there be any mistake.
On the other hand, I always turned in as soon as it is accepted. The homeworks were due every week, and could not be turned in sooner, but I always finished right after the class, but I would keep them in my book bag till the following week when the due day and accept date come in class.
In your 3 different classes, you did NOT have complete alternative. I would suggest that you include one more, that is, student can turn in as soon as they finish, and see what would happen. I am sure you will find this group of students would be straight A students like myself.
Again, procrastination is for usual students, not for straight A students who always have dicipline to complete as soon as possible.
But, do you know that in real time, people procrastinate often WIN. Why?
I got a classmate always wait till before due date, and he will come to borrow my homework or program, and he often brag to others that it to me a day or two to finish program, while it only took him an hour or two to finish.
When I worked at Bell Labs and Wall St later, I found all my colleagues who procrastinate seem to be also winners. They always have job, and I always did not because I finished as soon as I got.
Soon or later, they passed their work to me, and I did lots of theirs, and then they will complain that I was given easy work.
So, I decided to learn how to procrastinate one day. I decided that I would NOT mow my lawn and wait to see. So, eventually, I got a notice by township AFTER Memorial Day (a township deadline I guess) to mow my law or pay for fine. So, I mow once.
Then, I wait and see, and then I got another one after July 4, then I mow again.
Then, I wait and see again, and got another one after Labor Day long weekend.
So, eventually, all I need to mow my lawn is 3 times a year.
So, S, now you know better why I got lots of “free time” than normal people like you folks who do not procrastinate mowing your lawn ?
A note, I am an urban planner and land economics play a major role in my field. It is a somewhat niche field of study, but obviously no less important than mainstream economics.
My question or suggestion is that you maybe look at property economics (not just estate agency sales) from a behaviour point of view. For example, in my experience, most people make fairly irrational decisions on buying houses/properties, based on predetermined/conditioned ways of thinking, if looked at objectively. For example buying a hugely overpriced property just because it is in “the right area” etc.
Dan,
I am curious if you are using the PDF offer for some kind of an experiment.
My situation was somewhat unique, even in comparison to Cheng
I bought the original edition, liked it tremendously, and extensively marked the margings with my own notes and ideas. When the expanded edition came out I faced the dilemma of whether to buy the new book and, if yes, what to do with the first book. Least of all I wanted to start transfering my handwritten notes.
I am eternally grateful for the “Predictibly Irrational” solution to my issue.
Victoria
P.S. I will probably give the extended version to somebody as a gift.
Edit: I did buy the extended edition.
Cheng:
I am impressed by your razor sharp intellect, breadth of your knowledge and clarity of purpose. I could never imagine that anyone could know so much about so many things. You are my Shienstien.
Would you mind sharing with me (ChengzFan@freakshow.com) you inspiration and show me the way??
Dear Victoria,
Your problem is very easy to solve. What you do is buy a NEW version of Professor Areily’s book, and start reading it again, and copy “some still valid notes over”.
Yes, you may find some old notes no longer valuable when you read the book second time, and can be erased.
For example. I got a Jewish classmate at Berkeley very smart with GPA 3.83 as he told me. One day asked me an Abstract Algebra question that he could not prove. When I pointed him to right line of the right chapter, he said he could not get it. Well, I told him I read the book 4 times already BEFORE the Abstract Algebra class started.
I told him the right way to learn is when could not understand, GO BACK to previous chapter, and even go back to Freshman or Sophomore math prerequisite for Abstract Algebra.
The magic is that when you read a textbook 4 times thru 4 different “passes”, you may find each time you got different but more complete understanding, just like if you visit the same city for 4 times.
I would suggest that you loan your first version to your students or friends and “ask them to return with preset time”, say, 2 weeks, and ask them to return with pages of comments. You shall get lots of insights. DO NOT give that book to others that full of your notes.
Don’t you read Chapter 7 about the “Ownership”. Professor Areily said, “the more time and effort you put on something that worth MORE to you”, and that makes lots of sense, since I still kept this old chair Dr. Hann-Chang Jou gave me back in 1986. Why?
Because it has “lots of memory”. That winter night, he, as Stat graduate student and ticker for parking lot found this old chair still usable but throw away next to dumpster. He knew I did not have chair and pick that chair and drove to my attic that I rent for $140 every 2 weeks. I would never sell that chair.
Now, I just finished that Chapter 7, what I thought for past 20 years was exactly what Professor Areily said in his ownership chapter. Now, this old wooden chair with recline and spinable worth even more for me and my wife because my mother-in-law loved to sit at this chair, and every time she came visit, she sit at the chair and “invent” a unique way of sitting on this chair to feel very comfortable.
Now, my wife sitting on it all the time, and she feel that she is always empowered by her mom even if when she is not around.
So, keep your first book, and also buy the new version, and read it thru again later, one chapter per night or per week, and write your NEW feeling and notes.
One day, you may be surprised you know all these subjects EVEN BETTER than Professor Areily. That’s how I got almost all professors at Berkeley hang on the board because I read many more times of the textbook they chose.
——————————
Dan,
I am curious if you are using the PDF offer for some kind of an experiment.
My situation was somewhat unique, even in comparison to Cheng
I bought the original edition, liked it tremendously, and extensively marked the margings with my own notes and ideas. When the expanded edition came out I faced the dilemma of whether to buy the new book and, if yes, what to do with the first book. Least of all I wanted to start transfering my handwritten notes.
I am eternally grateful for the “Predictibly Irrational” solution to my issue.
Victoria
P.S. I will probably give the extended version to somebody as a gift.
Dear S,
I got 4 majors when I was at Berkeley and over 200 credits I took. I started with Pure Math major because Berkeley rejected my application 5 times, and I figured out Pure Math is the least competition for applicants, and I was correct. They rejected me due to my TOEFL score; I end up took TOEFL 5 times.
Then I did Applied Math and Statistics, afraid not able to get a job later, then I got accepted as Computer Science major because I was the only one got A+ in Assembly Language. I memorize all the code, binary numbers, …etc.
But then, English department gave me lots of headache. I still remember when they taught the word “phobia” and made use write an essay for that week, my essay name “ESL-Phobia”. Every essay I had to rewrite, and retype in dump typewriter, sometimes, I had to rewrite many times.
Berkeley tried to fit my thoughts into a particular “correct format” just like their so-called “programming style”. If your program work but not follow their style, you will get only 50 points out of 100. So, I would often write in my style, the before turn in, run thru “cb” command, the UNIX C Beautifier, to make the output look like Berkeley style.
So, why I move over to Electrical Engineering and Computer Science later? Because College of Letter and Sciences require more English than College of Engineering. So, I start a new set of requirements.
I did not have all the time to take all the credits, but Berkeley has a way to get credit by “taking exam”. e.g. I went to Physics Department to be test by professors one on one to get all 5 Physics courses credits. I went to Chinese department to get some course credits.
When I look back, if you one wants to know lots of things or learn lots of things, one must be “push to the corner”. One needs to be “reject again and again”. So, you keep on moving to some places where people do not push you, do not squeeze you.
And, you want to set a goal that is NOT reachable. e.g. if you want to get 80 points, even if you reach your goal, you still get only 80 points, but if you want to get 100 points all the time, even if you do not make it, you may get 99 points.
So, my goal is to get Nobel Prize, and get Nobel Prize on Economics, Medicine, Peace, and another equivalent is Turing Award, like Nobel Prize of Computer Science. In order to achieve the goal, I have to work very hard and smart. I need to learn from the best in each of every field.
So, I came to write to Professor Areily here on my study notes. He does not read nor respond is ok because according to Harvard Medical Professor’s recent research, who also got Ph.D on Sociology, that “Happiness can propergate like throwing stone on the water”, and I also attened his talk that same applied to “obesity”.
So, I simply “augamented” that experience by coming here to “influence” Professor Areily’s colleague and students indirectly.
Basically, that experience is that if YOU are fat, your friend may be 35% more likely to be fat, and then his friend 25%, then 10% than 5% … etc. and YOU do NOT need to know all these friends and friends friends, not geographic locations.
So, in this case, if I claim Professor Areily is “my Behavior Economics Professor at Duke University” and read his book and write all the notes and “talk to him” …etc, than all my friends, family, relatives, …etc would have been influenced in some neurological and psychological way. Yet, Professor Areily does NOT need to know me, nor read nor respond.
One day, Professor Ariely may be surprised that I learn much more about his lectures and knowledge than any of his students, undergrad or graduate.
Cheng
———————————
Cheng:
I am impressed by your razor sharp intellect, breadth of your knowledge and clarity of purpose. I could never imagine that anyone could know so much about so many things. You are my Shienstien.
Would you mind sharing with me (ChengzFan@freakshow.com) you inspiration and show me the way??
Dear Louis,
You are totally correct. People buying real estate at particular location or city is just like people drinking Coke, eating McDonald…etc.
When my son won #1 in NJ FBLA Competition over hundreds of all other high school and went to compete nationwide in Chicago in 2007, we visit this unique surgery museum in Chicago talking about a brand new field called “Neuroeconomics” staring in 2003.
Basically, companies like Coke or McDonald put lots of ads to “build an economic neuronetwork” in consumers’ brain.
For the same token, many realtors already build similar things in buyers’ brain so that they would choose particular brand than others.
And, as an experiment, I have successfully turn a “bad town” into good town for just a few years. How good is the town now? Top 100 Best Places to Live in American by CNN Money Magazine.
From then on, everyone want to move to the town to buy a piece of land or property, the township changed.
When you say “overpriced”, it is simply reflect that the “old value” you know and the “new value” established. And, you may also find that it is, in fact, NOT overpriced.
If you look at a town with real estate booming, it often has MANY realtors selling them or bring buyer in. So, they may look overpriced, but their buyers keep flood in, so the price will continue moving up. Eventually, the price does catch the value.
What value? “pride”, or “trademark”. Do you know, e.g. McDonold trademark itself worth dozens billions? e.g. If companies bidding projects in China, many will wait for the rep of AT&T to show up to start, some even will postpone or cancel the bidding should AT&T did not send rep over? So, AT&T does have huge value.
Now, it explains why AT&T almost bankrupt in a few yeas back, but the buyers kept the name. This also explain when real estate dropped but many people still want to buy New York City condo/coops, and buyers from abroad. Should Mayor Bloomberg change the name from New York City to other name, than lots of value may be gone.
This is same thing for a movie star. So, if a little movie star or singing star can not get fame with his or her current name, in Hong Kong, the Feng Suei master will often teach them to “change a name”.
So, how do you turn any city’s real estate to down to up quickly? For bad town, just pass a bill to “change a new name” so that all the bad connotations and memory already built into millions of buyer’s neuro network will be “removed”.
Or, get lots of PR and realtors to ads lots of good things, new images to “modify people’s memory”.
I hope this will answer your curiosity since Professor Areily may be too busy to even read this posting. And, let me try to be his TA to answer some of the questions.
Cheng
—————————–
Louis
A note, I am an urban planner and land economics play a major role in my field. It is a somewhat niche field of study, but obviously no less important than mainstream economics.
My question or suggestion is that you maybe look at property economics (not just estate agency sales) from a behaviour point of view. For example, in my experience, most people make fairly irrational decisions on buying houses/properties, based on predetermined/conditioned ways of thinking, if looked at objectively. For example buying a hugely overpriced property just because it is in “the right area” etc.
I do expect this offer for updates is another covert study! Something like ‘…when people were offered free updates, they pretended to have bought the book..’(otherwise, why not just provide the links on whe website directly)?
TK
PS: I did buy the book. It was quite good actually. Shame about my 3 years studying ‘conventional’ economics
Dear Professor Areily, I feel your Chapter 8 on “Keep Door Open” has some room for algorithmic improvement. Maybe you will find the solution interesting.
For Dana who could not decide from her two boy friends, it is common, and sometimes doors open by themselves in terms of boys and girl friends.
My classmate at Linear Programming at Berkeley IEOR Department, Edith, is a typical case that EVERYONE loves her, just love her and want to be around her. I still recalled that me and her and another boy who had NO reason to take Linear Programming but took it anyway just to “escort her”, make sure she does not disappear…
So, how could she “close the door” while the doors are keeping opening by themselves?
It was a great fun that every year when her birthday came, her parents will hold a huge birthday party and invite ALL boys who she know to her home to have a very fun party. And let all these boys to play some games as a group.
Eventually, some doors CLOSED by themselves (not coming any more or feel little chance to win her heart, see so many competitior.) like one of my EECS/CS classmate drove all the way from Los Angeles to her party to discover so many “competitors” then shy away.
Some other doors CLOSED by her sisters since she is the oldest of 4 sibling.
Then, finally, one day, she got married. I asked her why she picked her husband, she said she got a “deadline” to make decision, and at the time, these are the boys to choose from.
So, it sounds like your Duke Univ’s pick on who gets the basketball tickets. If Duke is very clever to chose who are the “real fan” to make the maximum value to issue tickets, you are sure that Edith or her parents are doing exactly THE SAME thing.
I missed the chance because I was stuck with Murray Hill Bell Labs in New Jersey, whereas, her husband QUIT his job in Manhattan and move back to Berkeley.
Time flies when my oldest son got admitted to Berkeley last year, we fly over to Berkeley and visit Edith’s parents and found Edith’s life is wonderful! They got a nice house in the best area, Fremont, near Silicon Valley with kids very successful!
She does not need to work and lived like a princess, why husband loves her so much. It seemed she got a great pick.
So, you should “interconnect” some chapters of your book such as Duke basketball case in Chapter 7 ownership and this Dana case in Chapter 8. Otherwise, your book is another case of “Vonn Newman Machines” style of information isolation, simply collects a set of unrelated items, whereas, in real world, most things are interconnected like neuronetwork.
Ok, I just send this link to Dr Wei Chiang who hold Ph.D from Columbia University and working at JP Morgan Chase at Tampa FL. I introduce Professor Areily’s book to him.
I also invited Fan Yang to this link who is straight A students in double major Economics and Accounting in famous Rutgers University whose alumni Milton Friedman ’32 won Nobel Economics Prize in 1976, whose theory is the the major solution for the US and the world to move out of the economic recession.
Just finished reading the book – powerful stuff and very well written.
I will be requesting the updates to see if they cover a powerful ‘influencer’ that wasn’t covered in the book.
Troy
Dear Professor Areily, I just read this Chapter 9 of “Expectation”, and I believe we have been doing that for great.
As you can said, I expect YOU to win Nobel Economics Prize, so will be my son, and believe or not, he read and finish your whole book in just a day or two!!!
“Expectations” is amazing!
For the past dozens year, I NEVER did any credit check with my tenants, and I never got any tenant not paying me rent. They are all wonderful, and I gave the condo to the first one came love this unit.
I always told them they are “trust worthy” tenant, so I do not need to do credit check on them, and they behave really trust worthy.
After 911, I got an middle east tenant whose son came to me want to rent my condo as student, and the first sentense I said to the father. “Wow! You looks so alike to my best friend in China, although you are from Middle East.”
Thereafter, he became my best friend, and he paint the condo for his son, he replace kitchen tiles, and even when his son went to Stanford Univ after 6 years, he replaced brand new stove, refrigerator, …etc for me.
When I was at Wall St, I have hundreds of copies of this letter http://hazleton.blogspot.com/ to every homeless person I encountered, and I told them that I expect them to be a successful person and move of homelessness. Do you know, at one time, mayor Bloomburg of NYC annonced that NYC homeless populations dropped, and dropped substentially.
What the amazing power of “expectation”.
Thanks much! This is very helpful and appreciated.
Rgds, Abhinav
Dear Professor Areily, I just read this chapter of Power of Price, and it seems a better title may be “The power of belief”. It is a more religious than market norm.
For example, I just rented out a 1br condo for $1,500 where as my neighbor listed hers from $1,200, down to $1,175, down to $1,100, now $1,050 and still not rented.
On the other hand, the power of price may be still valid as you can see, people prefer to rent higher price condo rather than lower price ones.
Dear Professor Areily, here is a wiki blog http://edisonandblueberryvillage.blogspot.com/ that designed based on your Behavior Economics, and can you believe, the whole community SOLD OUT! given the fact US real estate seemed to be bad in past years…
Ever since I found out about the expanded edition of PI, I was wondering about what sense does it make to buy another book. I was waiting for a chance to see this book in a bookstore where I could have a glance at the material and probably convince my boss to buy it for me (from my book budget).
This came to be as a surprise and a happy one. Dan, I am an online marketer and ever since I have read your book I have got so much interested in Behavioral Economics that I have gone quite deep into it and even implementing the experiments on my website at various places like shopping carts, menu items etc. Its really fun to experiment the theories that you learn.
Thanks again Dan, it is very nice of you.
Dear Professor Ariely,
My son has referred your great book to his high school classmate, son of Manila Mayor of Philippine, and he just went bought your book and sit up and read it thru in less than a day!!!
Amazing! Huh? He won #1 in NJ FBLA (Future Business Leader of America) competition last year, and went to compete nationwide FBLA at Atlanta GA and got #1 back too.
He got admitted to NYU and very interested in Psychology, but he has been so good at Business and obtain invitation letters from Goldman Sachs and JP Morgan Chase.
So, I introduce Behavior Economics and your wonderful book to him and told him that may be he should follow you at Duke Univ after graduating from NYU for graduate work.
Cheng
Dear Professor Ariely,
Fan told me yesterday that he just bought your wonderful book after I introduced to him. He is straight A student at Rutgers University double majoring Economics and Accounting, and I am advising him to add one more which is Psychology to become Triple major. I told him that this year there were 6 undergraduates at Rutgers University graduated with Triple major, and that is going to be very useful to him later.
Cheng
Dear Professor Airely,
Fan was very excited to call me that he finished first 1 and 2 chapter of your wonderful book.
He said he now understand how he was lured to get into study in Rutgers University from China.
I told him soon he should triple major with Psychology in addition to Accounting and Economics.
He is straight A student, and, as you may not know only 12 straight students graduated from Rutgers University in 2009, and only 6 students graduated with triple major.
Cheng
Dear Professor Areily,
Fan was eagerly to practice your “Power of FREE”, so he did an experiment to invite me and my family to the best Chinese restaurant at Highland Park NJ for lunch to thank me for introducing your wonderful book to him.
Wow! 10 dishes with final bill $150!!!
So, I was so excited with this “FREE lunch”, and took him to Open House at Edison Hollow South. We went thru both 1412 Raspberry Ct Edison NJ 08817 1br 1ba 1fl condo and 1919 Raspberry Ct Edison NJ 08817 and gave him a complete introduction and answer all the questions.
I told him each unit can put 4 beds, 2 in bedroom, and 2 in living room with an IKEA furniture to participate, and each student charges $500 would make $2,000 rent a month, and, of couse, very competitive with Rutgers University dorm where he paid $900+ a month with NO kitchen, with another student.
Therefore, if he can get them at under $200,000, it would be an A+ investment because the P/R (Price and Rent) ratio would be under 100, or 10% gain, as opposed to bank CD of about 2% and AT&T (T) stock of 7% dividend rate.
He was so excited and said I am even much better than NYU and Columbia University Real Estate professor. I think, of course, because I am not only going on Real Estate Theory, but I also running huge “real estate lab” that only Rutgers University has.
As you said in your wonderful book, “FREE” has magic power.
Cheng
Dear Professor Areily,
I just brought a group of Piscataway High School students to wonderful NJ Hot Air Balloon Festival and surprised to find out so many people reading your wonderful book.
The event even full of “FREE drinks” just any drink you can find from Quick Check or any supermarket. We NEVER taste so many brand of drinks, juices, soda …etc.
FREE! FREE! FREE! And, as you can tell the whole place was so crowd and many more crowd coming in, the auto line queue up all the way to miles away on Rt 22!!! when we heading home around 5pm … Why? I guess that’s the power of “cell phone”, everyone got FREE drink and food calling their friends to come!
Everyone told me that they will be coming for sure NEXT year, and EVERY year!!! Because for $25 admission, you got well over $200 worth of FREE items, almost every stand got free stuff…
I am wondering if you can work with all these vendors to include FREE coupons of drinks at end of your wonderful book, or just like this one as email, your wonderful book would be selling as crazy as this Hot Air Balloons …
I found your comment on marketplace on NPR interesting
“So, for example, imagine there was a central mechanism in which you could submit all your bills to, like a Web site, and you say here is what I owe, and here is the interest rate, and so on.”
I am a web programer and think it would be a great program, that I can write, to have online for visitors to use. I am curious what other rules are there if any regarding paying off which credit card faster.
If you have time and interested please contact me
773 793 9967
thanks
Ron Sattar