Predictably Irrational: The Hidden Forces that Shape Our Decisions by Dan Ariely
Why do restaurants make more money when they put a high priced item on the menu? The answer, claims Ariely, is not because more people order the high priced item, but because more people order the second most expensive item. After all, it’s not the most expensive item on the menu. Ariely is a proponent of a growing field called behavioral economics. Behavioral economists take issue with the economic staple of rationality—that people will always act in their best interest in any given situation or, when they choose not to, that market forces will sweep them back into compliance. Instead, proponents claim that human responses are always tempered by the situation and emotions in which we encounter them.
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