RSM450H1 Lecture Notes - Lecture 3: Precommitment, Dan Ariely, Daniel Kahneman
Document Summary
When we make choices that are in the future,we make wise choices. when we make those same choices today,we tend to make impulsive one: indifference point:ll=ss, lapse zone:a region where we fall prey to temptation utility utility, . 1)physical proximity when you get really close to ss, you almost feel like you have it, and not having feels like a loss. and we learn from the research of danny kahneman and others that loss hurt your. Much more than gains make you feel happy. 2)design the product,almost forget that ,they are in contrast (red box in class) 3)impose rules to delay choice/cooling off periods: how do people increase willpower . Always bucket by public: impose a decision point. E. g ask yourself: do you really wants to buy this product? when you are paying: budgets, implication: Preference reversal can occur - we want one thing at time t1 and regret it at time t2.
