Introduction
- the libertarian aspect of our strategies lies in the straightforward insistence that, in general, people should be free to do what they like - and to opt out of undesirable arrangements if they want to do so.
- if private companies or public officials think that one policy produces better outcomes, they can greatly influence the outcome by choosing it as the default. Setting default options can have huge effects on outcomes.
- we can influence the figure you will choose in a particular situation by ever-so-subtly suggesting a starting point for your thought process
- in many domains, the evidence shows that, within reason, the more you ask for, the more you tend to get. clever negotiators often get amazing deals for their clients by producing an opening offer that makes their adversary thrilled to pay half that very high amount
- a good way to increase people's fear of a bad outcome is to remind them of a related incident in which things went wrong; a good way to increase people's confidence is to remind them of a similar situation in which everything worked out for the best
- unrealistic optimism is a pervasive feature of human life; it characterizes most people in most social categories. when they overestimate their personal immunity from harm, people may fail to take sensible preventive steps
- people hate losses. roughly speaking, losing something makes you twice as miserable as gaining the same thing makes you happy.
- what this means is that people do not assign specific values to objects. when they give something up, they are hurt more than they are pleased if they acquire the very same thing
- loss aversion operates as a kind of cognitive nudge, pressing us not to make changes, even when changes are very much in our interests
- for lots of reasons, people have a more general tendency to stick with their current situation.
- those who are in charge of circulation know that when renewal is automatic, and when people have to make a phone call to cancel, the likelihood of renewal is much higher than it is when people have to indicate that they actually want to continue to receive the magazine
- the combination of loss aversion with mindless choosing implies that if an option is designated as the "default", it will attract a large market share.
- framing works because people tend to be somewhat mindless, passive decision makers. their reflective system does not do the work that would be required to check and see whether reframing the questions would produce a different answer
- people adopt sensible rules of thumb that somewhat lead them astray. because they are busy and have limited attention, they accept questions as posed rather than trying to determine whether their answers would vary under alternative formulations.
- when sally is hungry and appetizing aromas are emanating from the kitchen, we can say she is in a hot state. when sally is thinking abstractly on tuesday about the right number of cashews she should consume before dinner on saturday, she is in a cold state. we will call something "tempting" if we consume more of it when hot than when cold. none of this means that decisions made in the cold state are always better. sometimes we have to be in a hot state to overcome out fears about trying new things
- when we are in a cold state, we do not appreciate how much out desires and our behavior will be altered when we are "under the influence" of arousal.
- people are far more likely to splurge impulsively on a big luxury purchase when they receive an unexpected windfall than with savings that they have accumulated over time, even if those savings are fully available to be spent
