list of c o l l a b o r a t o r s

For some odd reason, what really gets her going is any re­ search question that includes the words simultaneity and endogeneity. Yesim is currently a professor at the University of Chicago.

Drazen Prelec

Drazen is one of the smartest people I have ever met and one of the main reasons I joined MIT . I think of Drazen as academic royalty: he knows what he is doing, he is sure of himself, and everything he touches turns to gold. I was hop­ ing that by osmosis, I would get some of his style and depth, but having my office next to his was not sufficient for this. Drazen is currently a professor at MIT .

Kristina Shampanier

Kristina came to M I T to be trained as an economist, and for some odd but wonderful reason elected to work with me. Kristina is exceptionally smart, and I learned a lot from her over the years. As a tribute to her wisdom, when she gradu­ ated from MIT, she opted for a nonacademic job: she is now a high-powered consultant in Boston.

Jiwoong Shin

Jiwoong is a yin and yang researcher. On one hand he carries out research in standard economics assuming that individuals are perfectly rational; on the other hand he carries out re­ search in behavioral economics showing that people are irra­ tional. He is thoughtful and reflective—a philosophical type—and this duality does not faze him. Jiwoong and I started working together mostly because we wanted to have fun together, and indeed we have spent many exciting hours

253

list of c o l l a b o r a t o r s

working together. Jiwoong is currently a professor at Yale University.

Baba Shiv

Baba and I first met when we were both PhD students at Duke. Over the years Baba has carried out fascinating research in many areas of decision making, particularly on how emo­ tions influence decision making. He is terrific in every way and the kind of person who makes everything around him seem magically better. Baba is currently a professor at Stan­ ford University.

Rebecca Waber

Rebecca is one of the most energetic and happiest people I have ever met. She is also the only person I ever observed to burst out laughing while reading her marriage vows. Rebecca is particularly interested in research on decision making ap­ plied to medical decisions, and I count myself as very lucky that she chose to work with me on these topics. Rebecca is currently a graduate student at the Media Laboratory at MIT .

Klaus Wertenbroch

Klaus and I met when he was a professor at Duke and I was a PhD student. Klaus's interest in decision making is mostly based on his attempts to make sense of his own deviation from rationality, whether it is his smoking habit or his pro­ crastination in delaying work for the pleasure of watching soccer on television. It was only fitting that we worked to­ gether on procrastination. Klaus is currently a professor at INSEAD.

254

Notes

1.Jodi Kantor, "Entrees Reach $40," New York Times (Oc­ tober 21,2006) .

2.Itamar Simonson, "Get Closer to Your Customers by Un­

	derstanding How They Make Choices," California						Man­
	agement	Review		(1993).
3.	Louis Uchitelle, "Lure of Great Wealth Affects Career
	Choices," New		York		Times	(November 27, 2006).
4.	Katie Hafner,		"In the Web World, Rich Now Envy the
	Superrich," New			York	Times	(November 21, 2006).
5.	Valerie Ulene,		"Car		Keys? Not So Fast," Los		Angeles
	Times	(January 8, 2007).
6.	John Leland, "Debtors Search for Discipline through
	Blogs," New York			Times (February 18, 2007).

7.Colin Schieman, "The History of Placebo Surgery," Uni­ versity of Calgary (March 2001).

8. Margaret Talbot, "The Placebo Prescription," New York Times (June 9, 2000).

n o t es

9. Sarah Bakewell, "Cooking with Mummy," Fortean Times (July 1999).

10.D. J . Swank, S. C. G Swank-Bordewijk, W. C. J . Hop, et al., "Laparoscopic Adhesiolysis in Patients with Chronic Abdominal Pain: A Blinded Randomised Controlled

Multi-Center Trial," Lancet (April 12, 2003).

11."Off-Label Use of Prescription Drugs Should Be Regu­ lated by the FDA," Harvard Law School, Legal Electronic Archive (December 11, 2006).

12.Irving Kirsch, "Antidepressants Proven to Work Only

Slightly Better Than Placebo," Prevention and Treatment (June 1998).

13. Sheryl Stolberg, "Sham Surgery Returns as a Research Tool," New York Times (April 25, 1999).

14. Margaret E. O'Kane, National Committee for Quality

	Assurance, letter to the editor, USA Today				(December 11,
	2006).
15.	Federal	Bureau of Investigation,		Crime	in the	United
	States	2004—Uniform	Crime	Reports	(Washington,
	D.C.: U.S. Government		Printing	Office,	2005).
16.	Brody Mullins, "No Free Lunch: New Ethics Rules Vex
	Capitol Hill," Wall Street		Journal	(January 29, 2007).
17.	"Pessimism for the Future," California Bar Journal					(No­
	vember	1994).

18.Maryland Judicial Task Force on Professionalism (Novem­ ber 10, 2003): http://www.courts.state.md.us/publications/ professionalism2003.pdf.

19.Florida Bar/Josephson Institute Study (1993).

20. DPA Correlator, Vol. 9, No. 3 (September 9, 2002). See also Steve Sonnenberg, "The Decline in Professionalism— A Threat to the Future of the American Association of Petroleum Geologists," Explorer (May 2004).

256

n o t es

21. Jan Crosthwaite, "Moral Expertise: A Problem in the Professional Ethics of Professional Ethicists," Bioethics, Vol.9 (1995): 361-379.

22. The 2002 Transparency International Corruption Percep­ tions Index, transparency.org.

23. McKinsey and Company, "Payments: Charting a Course to Profits" (December 2005).

257

Bibliography and

Additional Readings

Below is a list of the papers on which the chapters were based, plus suggestions for additional readings on each topic.

Introduction

RELATED READINGS

Daniel Kahneman, Barbara L. Fredrickson, Charles A. Schreiber, and Donald A. Redelmeier, "When More Pain Is

Preferred to Less: Adding a Better End," Psychological	Science
(1993).

Donald A. Redelmeier and Daniel Kahneman, "Patient's Memories of Painful Medical Treatments—Real-Time and Retrospective Evaluations of Two Minimally Invasive Proce­ dures," Pain (1996).

Dan Ariely, "Combining Experiences over Time: The Effects of Duration, Intensity Changes, and On-Line Measurements on Retrospective Pain Evaluations," Journal of Behavioral Deci­ sion Making (1998).

b i b l i o g r a p h y and additiona l readings

Dan Ariely and Ziv Carmon, "Gestalt Characteristics of Experienced Profiles," Journal of Behavioral Decision Mak­ ing (2000).

Chapter 1: The Truth about Relativity

RELATED READINGS
Amos Tversky, "Features of Similarity,"		Psychological
Review,	Vol. 84 (1977).
Amos Tversky and Daniel Kahneman, "The Framing of
Decisions and the Psychology of Choice," Science		(1981).
Joel	Huber, John Payne, and Chris Puto, "Adding Asym­

metrically Dominated Alternatives: Violations of Regularity

and the Similarity Hypothesis," Journal			of Consumer	Re­
search	(1982).
Itamar Simonson, "Choice Based on Reasons: The Case
of Attraction and Compromise Effects,"			Journal of	Con­
sumer	Research (1989).
Amos Tversky and Itamar Simonson, "Context-Dependent
Preferences," Management		Science (1993).

Dan Ariely and Tom Wallsten, "Seeking Subjective Domi­ nance in Multidimensional Space: An Explanation of the

Asymmetric	Dominance Effect," Organizational	Behavior
and Human	Decision Processes (1995).

Constantine Sedikides, Dan Ariely, and Nils Olsen, "Con­ textual and Procedural Determinants of Partner Selection: On Asymmetric Dominance and Prominence," Social Cogni­ tion (1999).

Chapter 2 : The Fallacy of Supply and Demand

BASED ON

Dan Ariely, George Loewenstein, and Drazen Prelec, "Coherent Arbitrariness: Stable Demand Curves without

260

b i b l i o g r a p hy and a d d i t i o n a l reading s

Stable	Preferences,"		Quarterly	Journal		of	Economics
(2003).
Dan Ariely, George Loewenstein, and Drazen Prelec,
"Tom Sawyer and		the	Construction		of Value," Journal of
Economic	Behavior	and Organization			(2006).

RELATED READINGS

Cass R. Sunstein, Daniel Kahneman, David Schkade, and liana Ritov, "Predictably Incoherent Judgments," Stanford Law Review (2002).

Uri Simonsohn, "New Yorkers Commute More Every­

where: Contrast Effects in the Field," Review of	Economics
and Statistics (2006).

Uri Simonsohn and George Loewenstein, "Mistake #37: The Impact of Previously Faced Prices on Housing Demand,"

Economic Journal (2006).

Chapter 3 : The Cost of Zero Cost

BASED ON

Kristina Shampanier, Nina Mazar, and Dan Ariely, "How Small Is Zero Price? The True Value of Free Products," Marketing Science (2007).

RELATED READINGS

Daniel Kahneman and Amos Tversky, "Prospect The­ ory: An Analysis of Decision under Risk," Econometrica (1979).

Eldar Shafir, Itamar Simonson, and Amos Tversky, "Reason-Based Choice," Cognition (1993).

261

b i b l i o g r a p h y and additiona l readingss

Chapter 4 : The Cost of Social Norms

BASED ON

Uri Gneezy and Aldo Rustichini, "A Fine Is a Price," Jour­ nal of Legal Studies (2000).

James Heyman and Dan Ariely, "Effort for Payment: A Tale of Two Markets," Psychological Science (2004).

Kathleen Vohs, Nicole Mead, and Miranda Goode, "The Psychological Consequences of Money," Science (2006).

RELATED READINGS

Margaret S. Clark and Judson Mills, "Interpersonal At­ traction in Exchange and Communal Relationships," Journal

of Personality		and Social Psychology,		Vol. 37 (1979), 12-24.
Margaret S. Clark, "Record Keeping in Two Types of Re­
lationships,"		Journal	of Personality	and Social	Psychology,
Vol.47 (1984), 549-557.
Alan Fiske, "The Four Elementary Forms of Sociality:
Framework		for a Unified Theory of Social Relations," Psy­
chological	Review		(1992).
Pankaj Aggarwal, "The Effects of Brand Relationship
Norms on	Consumer Attitudes and			Behavior," Journal of
Consumer	Research		(2004).

Chapter 5: The Influence of Arousal

BASED ON

Dan Ariely and George Loewenstein, "The Heat of the Moment: The Effect of Sexual Arousal on Sexual Decision Making," Journal of Behavioral Decision Making (2006).

RELATED READINGS

George Loewenstein, "Out of Control: Visceral Influences on Behavior," Organizational Behavior and Human Deci­ sion Processes (1996).

262

b i b l i o g r a p hy and additiona l reading s

Peter H. Ditto, David A. Pizarro, Eden B. Epstein, Jill A. Jacobson, and Tara K. McDonald, "Motivational Myopia:

Visceral	Influences	on Risk Taking Behavior," journal of
Behavioral	Decision	Making	(2006).
Chapter 6: The Problem of Procrastination and Self-Control
BASED ON
Dan Ariely and		Klaus	Wertenbroch, "Procrastination,

Deadlines, and Performance: Self-Control by Precommitment," Psychological Science (2002).

RELATED READINGS

Ted O'Donoghue and Mathew Rabin, "Doing It Now or Later," American Economic Review (1999).

Yaacov Trope and Ayelet Fishbach, "Counteractive SelfControl in Overcoming Temptation," journal of Personality and Social Psychology (2000).

Chapter 7: The High Price of Ownership

BASED ON

Ziv Carmon and Dan Ariely, "Focusing on the Forgone: How Value Can Appear So Different to Buyers and Sellers,"

journal of Consumer		Research	(2000).
James Heyman, Yesim Orhun, and Dan Ariely, "Auction
Fever: The	Effect	of Opponents and Quasi-Endowment
on Product	Valuations," journal		of Interactive	Marketing
(2004).

RELATED READINGS

Richard Thaler, "Toward a Positive Theory of Consumer Choice," journal of Economic Behavior and Organization

(1980).

263

b i b l i o g r a p h y and additiona l readings

Jack Knetsch, "The Endowment Effect and	Evidence of
Nonreversible Indifference Curves," American	Economic

Review, Vol. 79 (1989), 1277-1284.

Daniel Kahneman, Jack Knetsch, and Richard Thaler, "Experimental Tests of the Endowment Effect and the Coase

Theorem," Journal of Political	Economy	(1990).
Daniel Kahneman, Jack Knetsch, and Richard H. Thaler,
"Anomalies: The Endowment	of Effect, Loss Aversion,		and
the Status Quo Bias," Journal	of Economic	Perspectives,	Vol.
5 (1991), 193-206.

Chapter 8: Keeping Doors Open

BASED ON

Jiwoong Shin and Dan Ariely, "Keeping Doors Open: The Effect of Unavailability on Incentives to Keep Options Via­ ble," Management Science (2004).

RELATED READINGS

Sheena Iyengar and Mark Lepper, "When Choice Is Demotivating: Can One Desire Too Much of a Good Thing?"

Journal of Personality and Social Psychology (2000). Daniel Gilbert and Jane Ebert, "Decisions and Revisions:

The Affective Forecasting of Changeable Outcomes," Jour­

nal of Personality	and Social Psychology	(2002).
Ziv Carmon,	Klause Wertenbroch,	and Marcel Zeelen-

berg, "When Deliberating Makes Choosing Feel Like Los­ ing," Journal of Consumer Research (2003).

Chapter 9: The Effect of Expectations

BASED ON

John Bargh, Mark Chen, and Lara Burrows, "Automaticity of Social Behavior: Direct Effects of Trait Construct and

264

b i b l i o g r a p h y and a d d i t i o n a l reading s

Stereotype Activation on Action," Journal		of Personality and
Social	Psychology (1996).
Margaret Shin, Todd Pittinsky, and Nalini Ambady, "Ste­
reotype Susceptibility: Identity Salience and Shifts in			Quanti­
tative Performance," Psychological Science		(1999).
Sam	McClure, Jian Li, Damon Tomlin, Kim		Cypert,

Latané Montague, and Read Montague, "Neural Correlates of Behavioral Preference for Culturally Familiar Drinks," Neuron (2004).

Leonard Lee, Shane Frederick, and Dan Ariely, "Try It, You'll Like It: The Influence of Expectation, Consumption,

and	Revelation on Preferences for Beer," Psychological	Sci­
ence	(2006).
Marco Bertini, Elie Ofek, and Dan Ariely, "To Add or
Not	to Add? The Effects of Add-Ons on Product Evalua­
tion," Working Paper, HBS (2007).

RELATED READINGS

George Loewenstein, "Anticipation and the Valuation of Delayed Consumption," Economic Journal (1987).

Greg Berns, Jonathan Chappelow, Milos Cekic, Cary Zink, Giuseppe Pagnoni, and Megan Martin-Skurski, "Neurobiological Substrates of Dread," Science (2006).

Chapter 1 0 : The Power of Price

BASED ON

Leonard Cobb, George Thomas, David Dillard, Alvin Merendino, and Robert Bruce, "An Evaluation of Internal Mammary Artery Ligation by a Double-Blind Technic,"

New England Journal of Medicine (1959).

Bruce Moseley, Kimberly O'Malley, Nancy Petersen, Terri Menke, Baruch Brody, David Kuykendall, John Hollingsworth,

265

b i b l i o g r a p hy and additiona l readings

Carol Ashton, and Nelda Wray, "A Controlled Trial of Ar­ throscopic Surgery for Osteoarthritis of the Knee," New En­ gland Journal of Medicine (2002).

Baba Shiv, Ziv Carmon, and Dan Ariely, "Placebo Effects of Marketing Actions: Consumers May Get What They Pay For," Journal of Marketing Research (2005).

Rebecca Waber, Baba Shiv, Ziv Carmon, and Dan Ariely, "Paying More for Less Pain," Working paper, M I T (2007).

RELATED READINGS

Tor Wager, James Rilling, Edward Smith, Alex Sokolik, Kenneth Casey, Richard Davidson, Stephen Kosslyn, Robert Rose, and Jonathan Cohen, "Placebo-Induced Changes in fMRI

in the Anticipation and Experience of Pain," Science				(2004).
Alia Crum and Ellen Langer, "Mind-Set Matters: Exer­
cise and the Placebo Effect," Psychological			Science	(2007).
Chapters 1 1	and	1 2 : The Context of Our Character,
		Parts I and II
BASED ON
Nina Mazar and Dan Ariely, "Dishonesty in Everyday
Life and Its Policy Implications," Journal			of Public Policy
and Marketing	(2006).
Nina Mazar, On Amir, and Dan Ariely, "The Dishonesty
of Honest People: A Theory of Self-Concept Maintenance,"
Journal of Marketing		Research (2008).

RELATED READINGS

Max Bazerman and George Loewenstein, "Taking the Bias out of Bean Counting," Harvard Business Review (2001).

Maz Bazerman, George Loewenstein, and Don Moore, "Why Good Accountants Do Bad Audits: The Real Problem

266

b i b l i o g r a p hy and a d d i t i o n a l readings

Isn't Conscious Corruption. It's Unconscious Bias," Harvard

Business Review	(2002).
Maurice Schweitzer and Chris Hsee, "Stretching the Truth:
Elastic Justification and Motivated Communication				of Uncer­
tain Information," Journal		of Risk and	Uncertainty	(2002).
Chapter 1 3 : Beer and Free Lunches
BASED ON
Dan Ariely and Jonathan Levav, "Sequential Choice in
Group Settings: Taking the Road Less Traveled and Less En­
joyed," Journal	of Consumer	Research	(2000).

Richard Thaler and Shlomo Benartzi, "Save More To­ morrow: Using Behavioral Economics to Increase Employee Savings," Journal of Political Economy (2004).

RELATED READINGS

Eric J . Johnson and Daniel Goldstein, "Do Defaults Save Lives?" Science, Vol. 302 (2003), 1338-1339.

267

Index

A
A A R P , 71
Adventures	of	Tom Sawyer,		The
(Twain),		2 4 - 2 5 , 3 9 - 4 0 ,		4 2 - 4 3
advertising,	virtual ownership and, 1 3 6
airlines:
bankruptcy of, 2 0 4
frequent-flyer			miles and, 2 2 7 - 2 8
Allen, W o o d y ,		6 9
A m a z o n :
FREE! shipping promotio n				and,
5 8 - 5 9 ,	6 2
gift certificate experiment and, 5 8
Ambady, Nalini,			169
A m e r i c a Online			( A O L ) , 5 9 - 6 0
A m i r , O n , 1 9 6 - 9 7 , 2 0 6 , 2 1 9 - 2 0 , 2 6 1
anchoring,	2 5 - 4 8
arbitrary coherence and, 2 6 - 3 0 ,
4 3 - 4 8
compensation			for work and, 3 9 - 4 3
enduring	effect of, 3 4 - 3 6
free market and free trade and, 4 7 - 4 8
housing prices and, 3 0 - 3 1
imprinting in animals c o m p a r e d to,
2 5 , 3 4 ,	43

life decisions and,			4 3 - 4 5
prices and, 2 5 - 3 6 ,			4 5 - 4 7
Starbucks and, 3 7 - 3 9
supply	and d e m a n d and, 4 5 - 4 6
switching from old to new a n c h o r s
a n d , 3 1 - 3 6
translation of first			decisions	into
long - term habits			and, 3 6 - 3 9
angina pectoris, efficacy of surgical
p r o c e d u r e for, 1 7 3 - 7 4 , 191
antibiotics, placebo effect and,				1 8 9
Antiques	Roadshow,		1 3 0
a r b i t r a r y coherence:
free m a r k e t and free trade and, 4 7 - 4 8
life decisions and,			4 3 - 4 5
prices and, 2 6 - 3 0 ,			4 5 - 4 7
supply	and d e m a n d and, 4 5 - 4 6
arousal,	8 9 - 1 0 5
painkillers		during childbirth		and,
1 0 3 - 4
safe driving		and, 1 0 2 - 3

safe sex and, 89 , 9 5 , 9 6 - 9 7 , 9 9 , 1 0 0 - 1 0 2 , 1 0 7

sexual, decision m a k i n g under, 8 9 - 1 0 2 , 1 0 6 - 8

I n d e x

a r o u s al			(continued)
u n d e r p r e d i c t i on					of effect			of, 9 8 - 9 9
understanding different aspects of
ourselves				a n d ,		1 0 4 - 5
a r t h r o s c o p i c knee					surgery,			1 7 4 - 7 6
A s i a n - A m e r i c a n s ,					stereotypes				about,
169
Assael, J a m e s ,				2 3
Assael,	Salvador, 2 3 - 2 5 ,						2 6
Association			of Petroleum				Geologists,
2 1 1
attractiveness, decoy effect								and, 1 1 - 1 4 ,
1 5
auctions:
a r b i t r a r y coherence and,								2 6 - 3 0
online,		1 3 5 - 3 6
second		price, 2 8 n
automobiles:
p r e c a u t i o n a r y devices							in,	to	foil
unsafe teenage behavior,									1 0 2 - 3
routine m a i n t e n a n c e of, 1 2 0 - 2 1
test driving, expectation s and, 161
automobile			sales:
F R E E ! oil changes						and, 6 0 - 6 1
relativity problem						and, 2 , 19, 2 1
value in owner's eyes and,								1 2 9 , 1 3 4 ,
1 3 5
B
B a r g h , J o h n , 170
Barlow, J o h n Perry,						8 6
Beatles,	8 5
beer:
expectations ' impact on taste of,
1 5 7 - 5 9 , 1 6 1 - 6 2 , 1 6 3 - 6 4 ,									172
ordering process and enjoyment of,
2 3 1 - 3 6
behavioral			economics :
conventional				e c o n o m i c s vs.,					x v i i i - x x ,
2 3 9 - 4 0
free lunches				from perspective of,
2 4 0 - 4 3
see also		specific			topics
B e n a r t z i , Shlomo,					2 4 2
Bender, W a l t e r , 9 2
benefits	(compensation) :

goodwill created by, 8 3 recent cuts in, 8 2

Berkeley, University of California at, 9 1

arousal experiment at, 9 1 - 9 7 , 9 8 - 9 9 Bertini, M a r c o , 1 5 9 - 6 0 , 2 6 1 - 6 2

Bible, 2 0 8 , 2 1 5

blogging, about overspending and debt problems, 1 2 2 - 2 3

brain:

brand associations of C o k e and Pepsi a n d , 1 6 6 - 6 8

honesty and reward centers in, 2 0 3 ,

2 0 8
brand associations, taste of C o k e				vs.
Pepsi and,	1 6 6 - 6 8
bread - making machines,		1 4 - 1 5
Brouillet, J e a n - C l a u d e ,		2 3 - 2 4
Buffett, W a r r e n , 17
bundling of services, 1 2 0 - 2 1
Burning M a n , Black R o c k Desert,				Nev.,
8 6 - 8 8
B u r r o w s , L a r a ,	170
C
cable television,	"trial" promotions
a n d , 1 3 6 - 3 7
"Can't Buy M e Love," 8 5
C a r m o n , Ziv, 1 2 9 , 1 3 0 , 1 8 1 , 2 6 2
C a r o l i n a Brewery, Chapel Hill,			N . C . ,
2 3 1 - 3 7
cash, see money
caudate nucleus,	2 0 3
C E O s , compensation of,		1 6 - 1 7 ,	18
C h a r l e m a g n e , 188

Charles II, king of England , 188 cheating on tests, 1 9 8 - 2 0 2

e x t r e m e cheating and, 2 2 1 - 2 2 hono r cod e statements and, 2 1 2 - 1 3 m o r a l b e n c h m a r k s and, 2 0 6 - 8 , 2 1 3 with n o n m o n e t a r y currency rather

than c a s h , 2 1 9 - 2 2

self-restraint in, 2 0 1 - 2 , 2 0 8 , 2 1 3 checking accounts , FREE!, 6 0 Chen , M a r k , 170

childbirth, painkillers during, 1 0 3 - 4 C h i n a :

adoptions in, 1 3 4 lack of trust in, 2 1 4 savings rate in, 1 0 9

270

I n d e x

c h o c o l a t e:

in free e x c h a n g e (Halloween) experiment, 5 6 - 5 8

pricing of, FREE! items and, 5 1 - 5 4 , 6 4 - 6 5

rational cost-benefit analysis and, 6 4 - 6 5

C l a r k , M a r g a r e t , 6 8

closets, consumerism and size of, 110 clothing, w o r n and returned to store for

full refund, 1 9 6 , 2 2 3 C o b b , L e o n a r d , 1 7 3 - 7 4 coffee:

questioning outlays for, 4 4

at Starbucks vs. Dunkin' Donuts, 3 7 - 3 9 , 4 7

upscale ambience and, 3 9 , 1 5 9 - 6 0 C o k e , taste tests of Pepsi and, 1 6 6 - 6 8

cold remedies, price and efficacy of, 1 8 4 colds, antibiotics as placebo for, 18 9 comparisons, see relativity compensation:

cash vs. gift rewards and, 8 2 - 8 3 of C E O s , 1 6 - 1 7 , 18

poetry reading experiment and, 4 0 - 4 2

recent cuts in benefits and, 8 2 social exchang e in workplace and,

8 0 - 8 3

and transformation of activity into

work,	3 9 - 4 3
see also	salaries
compensation consulting firms,				17
conditioning, placebo effect			and, 17 9
condoms:
i m p o r t a n c e of		widespread
availability		of, 1 0 0 - 1 0 2
and willingness to engage			in
unprotected sex when aroused, 89 ,
9 5 , 9 6 - 9 7 , 9 9 , 1 0 7
conflicts:
expectations and perception				of,
1 5 6 - 5 7 , 1 7 1 - 7 2
neutral third part y and, 172
conformity, ordering food and drink
a n d , 2 3 8
Congress, U . S . ,		1 5 1 , 1 5 2 , 2 2 8

ethics reforms in, 2 0 4 - 6

consumerism ,			1 0 9 - 1 0
c o n t e x t	effects,		2 4 0
control, mistaken perception of, 2 4 3
c o r p o r a t e scandals,				1 9 6 , 2 0 4 , 2 1 4 , 2 1 9 ,
2 2 2 - 2 3
cost-benefit		analysis:
dishonesty		and, 2 0 2 - 3 , 2 0 4
relative value and,					6 4 - 6 5
credit c a r d s ,		110 , 2 0 4
"ice glass" m e t h o d					for, 1 2 2
self-control, author's proposal for,
1 2 3 - 2 6 ,		2 4 2
two - cycle		billing and , 2 2 8
Crocodile	Dundee,			7 - 8
C y p e r t , K i m , 1 6 6 - 6 8
D
dating:
decoy	effect		and,	1 0 - 1 4 , 1 5
and likelihood of engaging in

i m m o r a l behaviors when aroused , 9 4 - 9 5 , 9 6 , 9 7 , 1 0 7

separation of social and marke t

n o r m s and , 6 9 ,		75-76
day c a r e ,	tardiness	fines	at, 7 6 - 7 7
deadlines,	setting one's		own , 1 1 2 - 1 6 ,
117, 1 1 8 - 1 9
debt blogging, 1 2 2 - 2 3
decision making:
and indecision in face of t w o				choices,
1 5 1 - 5 3
sexual arousal and, 8			9 - 1 0 2 ,	1 0 6 - 8

see also first decisions; options decoy effect, 5 - 6 , 8 - 1 5

bread - making machines and, 1 4 - 1 5

dating and , 1 0 - 1 4 , 1 5
Economist	subscriptions and,	1 - 3 ,
4 - 6 , 9 - 1 0
house purchases and, 8 - 9
menu pricing and, 4
vacation packages and, 10
visual representation of, 9
d e m a n d :
price changes and, 4 6 - 4 7
supply and, in standar d e c o n o m i c
f r a m e w o r k , 4 5 - 4 6
d e m o c r a c y , dizzying a b u n d a n c e		of
options	in, 148

271

I n d e x

D e s c a r t e s , R e n e , 4 3
diet, procrastination and			self-control
and, 1 1 0 - 1 1 , 116
discounts:
discounting of quality along with,
1 8 3 - 8 7
relativity and,		1 9 - 2 0
dishonesty,	1 9 5 - 2 3 0
congressional		initiatives	against,
2 0 4 - 6
contemplation		of mora l	b e n c h m a r k s
and, 2 0 6 - 9 ,		2 1 3
c o r p o r a t e	scandals and,		1 9 6 , 2 0 4 ,

2 1 4 , 2 1 9 , 2 2 2 - 2 3

cost-benefit analysis and, 2 0 2 - 3 , 2 0 4 decline of professional ethics and,

2 0 9 - 1 1 , 2 1 3 - 1 4

easier when removed from cash, 2 1 7 - 3 0

expense reports and, 2 2 3 - 2 4 h u m a n natur e and, 2 2 6 - 2 7 oaths and, 2 0 8 - 9 , 2 1 1 - 1 3

rationalization of, 2 1 9 , 2 2 2 , 2 2 4 , 2 2 5 - 2 7 , 2 2 9

risk of being caught and, 2 0 1 , 2 0 4 small acts of, 197, 2 0 4 , 2 1 7 - 1 8 ,

2 2 7 - 2 8

standard - issue criminal activities a n d , 1 9 5 , 1 9 6 - 9 7

wardrobing and, 1 9 6 , 2 2 3

see also	cheating on tests; honesty
Dr. Jekyll	and	Mr. Hyde (Stevenson), 9 8
"door g a m e , "		1 4 3 - 4 8
d o p a m i n e ,	168

dorsolateral aspect of prefrontal c o r t e x ( D L P F C ) , 16 7

drinks:

energy, impact of price and hype on efficacy of, 1 8 4 - 8 7

expectation s and taste of, see taste ordering process and enjoyment of,

2 3 1 - 3 8 driving:

teenage, foiling unsafe behavior in, 1 0 2 - 3

test, expectation s and, 161 drugs , w a r on, c u s t o m s agents'

willingness to risk life in, 8 4

Duke University basketball tickets, 1 2 7 - 3 3

Dunkin' Donuts, moving anchor to Starbucks from, 3 7 - 3 9

D V D players, FREE! D V D offers and, 5 5

E

e a r m a r k i n g , congressional restrictions o n , 2 0 4 - 5

E b b e r s , Bernie, 2 2 3 economics , standard:

arbitrary coherence at odds with, 4 3 , 4 5 , 4 7 - 4 8

behavioral	economics vs., x v i i i - x x ,
2 3 9 - 4 0
cost-benefit	analysis in, 6 4 - 6 5
h u m a n rationality assumed in,		x i x ,

x x , 2 3 9 - 4 0

supply and d e m a n d in, 4 5 - 4 6 Economist subscription offers, 1 - 3 ,

4 - 6 , 9 - 1 0 education, 8 4 - 8 6

igniting social passion for, 8 5 - 8 6 "No Child Left Behind" policy and, 85

"elderly," behavior affected by priming

concept of,			1 7 0 - 7 1
empirical tests, in science, x v - x v i
employees:
payment of, see				compensation;
salaries
social vs. market n o r m s in
companies'			relations with,			8 0 - 8 4
theft and fraud at workplace						ascribed
t o , 1 9 5 - 9 6
endowmen t		effect,		1 2 9 - 3 5
energy drinks, impact of price and							hype
on	efficacy		of,	1 8 4 - 8 7
E n r o n scandal,			1 9 6 , 2 0 4 , 2 1 9
envy, comparison s and, 1 5 - 1 9
epidurals, 1 0 3 - 4
Escape	from	Freedom			( F r o m m ) , 148
E u r o p e , savings			rate in, 1 0 9
exercise, procrastination and, 111
expectations , 1 5 5 - 7 2
beer experiments and, 1 5 7 - 5 9 ,
1 6 1 - 6 2 , 1 6 3 - 6 4 , 1 7 2
brand associations					of C o k e and		Pepsi
a n d , 1 6 6 - 6 8

272

I n d e x

conflicts and, 1 5 6 -	5 7 , 1 7 1 - 7 2
depth of description in caterers'
offerings and, 1 6 4
exotic - sounding ingredients and,
1 6 4 - 6 5
football plays and,	1 5 5 - 5 6 , 171
garage sales and, 1	6 2 - 6 3
knowledge before vs. after experience

a n d , 1 6 1 - 6 4

marketing hype and, 1 8 6 - 8 7 physiology of experience altered by,

	1 6 1 - 6 4 , 1 6 6 - 6 8
placebo effect and, 1 7 3 - 9 4 ; see					also
	placebo effect
sports c a r test drives and, 161
stereotypes and, 1 6 8 - 7 1
taste and, 1 5 7 - 6 8
upscale coffee ambience and,				1 5 9 - 6 0
wineglasses and, 165
expense reports , dishonesty in,				2 2 3 - 2 4
experience, not learning from, xvii
experiments:
extrapolation of findings in, x x i - x x i i
isolating		individual forces in,		x x i
see	also	specific topics
F
Fastow, Andrew, 2 1 9
fines,	in social context , 7 6 - 7 7
first	decisions:
power of, 4 4
shape of ou r lives and, 4 3
translation of, into long-term				habits,
	3 6 - 3 9
see	also	anchoring
first	impressions:
imprinting and, 2 5 , 3 4 , 43
see	also	arbitrary coherence
Fiske, Alan, 6 8
food:
expectations and taste of,			1 6 4 - 6 5
ordering process and enjoyment					of,
	2 3 7 - 3 8
see	also	taste
food	labels, allure of "zero" on, 6 1 - 6 2
football plays, expectations			and
	perception of, 1 5 5 - 5 6 ,		171
Ford M o t o r C o m p a n y , 1 1 9 - 2 1

F r a n c e , A m a z o n ' s FREE! shipping p r o m o t i o n in, 5 9 , 6 2

Frederick, Shane, 157, 161 , 2 6 2 F R E E ! , 4 9 - 6 3

A m a z o n gift certificate offer and, 5 8 A O L price structur e and, 5 9 - 6 0 checking a c c o u n t s o r mortgage s and,

6 0

chocolate pricing experimen t and, 5 1 - 5 4 , 6 4 - 6 5

exchange s a n d , 5 5 - 5 8 fear of loss and, 5 4 - 5 5

high-definition D V D players and, 5 5 history of zero and, 5 0

museu m admission fees and, 61

oil changes with c a r purchases and, 6 0 - 6 1

preventive health c a r e and, 6 2 - 6 3 rational cost-benefit analysis and,

6 4 - 6 5

shipping offers on orders over a certain a m o u n t and, 5 8 - 5 9 , 6 2

social policy and, 6 2 - 6 3 time considerations and, 61

free, working for, 7 1

free lunches,		2 4 0 - 4 4
free	m a r k e t ,	4 7 - 4 8
free	t r a d e , 4 7 -		4 8
F r e n k , H a n a n ,			x v
frequent-flyer		miles, 2 2 7 - 2 8

F r e u d , Sigmund, 9 8 , 2 0 3

friendly requests, social n o r m s and, 6 8 , 7 0 - 7 1 , 7 3 - 7 4 , 7 7 - 7 8

F r o m m , E r i c h , 148

functional magneti c resonanc e imaging ( f M R I ) , taste test of C o k e and Pepsi and, 1 6 6 - 6 8

furniture, assembling, pride of ownership and, 1 3 5

G

g a r a g e sales, 1 2 9 - 3 0 , 1 6 2 - 6 3 gasoline, price increases and d e m a n d

for, 4 7

G e l l - M a n n , M u r r a y , 2 4 4 gender stereotypes, 169 Gerbi (Italian physician), 1 7 7 gift certificate experiment , 5 8

273

I n d e x

gifts:

Burning M a n based on e x c h a n g e of,

8 6 - 8 8
cash vs., as employee r e w a r d , 8 2 - 8 3
mere mention of money and, 73—74
social vs. m a r k e t n o r m s and, 7 2 - 7 4
Gneezy,		Uri,		7 6 - 7 7
Gone	with		the	Wind,		1 5 0
G o o d e , M i r a n d a , 7 4 - 7 5
G o o g l e ,		83
goslings,		imprinting in, 2 5 , 3 4 , 4 3
government:
social c o n t r a c t between							citizens	and,
8 4
see	also C o n g r e s s ,					U . S .
gridlock, legislative,						1 5 1 , 1 5 2
Guidelines			for Lawyer				Courtroom
Conduct				(Sweeney), 2 1 3
guilt,	social n o r m s and, 7 7
H
habits:
first	decisions				translated into,
3 6 - 3 8
questioning,					4 4
Halloween			experiment , 5 6 - 5 8
H a m l e t		(Shakespeare), x v i i i - x i x ,						2 3 2
H a r v a r d Business School,							1 9 7 - 9 8
honesty experimen t at,							1 9 8 - 2 0 2
health	c a r e , 1 1 0 - 1 1
bundling of medical tests and
procedures and,						1 1 9 - 2 1
defeating			procrastination in, 1 1 7 - 2 1
FREE! procedures and,							6 2 - 6 3
m a n d a t o r y checkups and , 118
placebo effect and,						1 7 3 - 9 4 ; see		also

placebo effect

price of medical treatments and, 176 , 1 8 0 - 8 7 , 1 9 0

public policy and spending on, 1 9 0 scientifically controlled trials and,

1 7 3 - 7 6

self-imposed deadlines and, 1 1 8 - 1 9 helping, thinking about money and, 7 4 ,

7 5 herding, 3 6 - 3 8

self-herding and, 3 7 - 3 8

H e y m a n , J a m e s , 6 9 - 7 1 , 1 3 6 , 2 6 2 - 6 3

H I V - A I D S , 9 0

Holy R o m a n emperors, placebo effect

a n d , 1 8 8
H o m e Depot, 7 8
H o n d a , 1 2 0 , 1 2 1
honesty, 1 9 5 - 2 3 0
contemplation of moral benchmarks
and, 2 0 6 - 9 ,	2 1 3
dealing with cash and, 2 1 7 - 3 0
i m p o r t a n c e of,	2 1 4 - 1 5
as mora l virtue, 2 0 3

oaths and, 2 0 8 - 9 , 2 1 1 - 1 3 , 2 1 5

r e w a r d centers in brain and, 2 0 3 , 2 0 8

Smith's explanation for, 2 0 2 , 2 1 4 superego and, 2 0 3 - 4 , 2 0 8

see also dishonesty H o n g , J a m e s , 21 hono r codes, 2 1 2 - 1 3

h o r m o n e s , expectatio n and, 179 house sales:

anchoring and, 3 0 - 3 1 relativity and, 8 - 9 , 19

value in owner's eyes and, 1 2 9 , 135

I
ice c r e a m ,	F R E E ! , time spent on line for,
61
"Ikea effect," 1 3 5
imprinting, 2 5 , 3 4 , 4 3
see also	anchoring
indecision,	1 5 1 - 5 3
individualism, 6 8
thinking	about money and, 7 4 , 7 5
ingredients, exotic -sounding, 1 6 4 - 6 5

insurance fraud, 1 9 6 , 2 2 3

internal m a m m a r y artery ligation,

1 7 3 - 7 4 ,	191
inventiveness,	6 8
I R A (Irish Republican A r m y ) , 1 5 6 - 5 7
I r a n , lack of trust in, 2 1 5
irrational behaviors, x i x - x x

opportunities for improvement and,

	2 4 0 - 4 4
systematic and predictable nature of,
	x x , 2 3 9
see	also specific topics
1RS	(Internal Revenue Service), 1 9 6

274

I n d e x

J
J a p a n ,		savings		rate in,	1 0 9
jealousy, comparisons and, 1 5 - 1 9
Jobst suit, 1 9 2 - 9 4
Johnston, David Cay, 2 0 4
judgment and decision					making	( J D M ) ,
	xviii
see also			behavioral		economics
"Just say no" campaign , 1 0 0 , 1 0 1
K
K a h n e m a n , Daniel, 1 9 , 1 2 9
knee	surgery, a r t h r o s c o p i c , 1 7 4 - 7 6
Knetsch, J a c k ,				1 2 9
K o r a n ,		2 1 5
L
Latin A m e r i c a , lack of trust in,						2 1 4
Lay, Kenneth, 2 1 9
Leaves		of	Grass	( W h i t m a n ) , 4 0 - 4 1
L e e ,	L e o n a r d , 2 1 , 1 5 7 - 5 9 , 161, 2 6 3
legal	profession:
attempts at improving ethics of,							2 1 3 - 1 4
decline			of ethics and values in,				2 0 9 - 1 0
leisure, blurring of partition between
	work and, 8 0 , 81
Leland, J o h n , 1 2 2 - 2 3
L e o III, Pope, 188
L e v a n , J o n a t h a n , 2 3 1 - 3 7 , 2 6 3
L i , J i a n , 1 6 6 - 6 8
Lincoln, A b r a h a m , 17 7
L i n u x , 8 1
lobbyists,			congressional restrictions					on,
	2 0 5
Loewenstein, George , 2 1 , 2 6 , 3 0 - 3 1 ,								3 9 ,
	8 9 ,	2 6 3 - 6 4
L o r e n z , K o n r a d , 2 5 , 4 3
loss:
aversion to,				1 3 4 , 1 3 7 , 1 3 8 , 1 4 8 - 4 9
fear of,			5 4 - 5 5
loyalty:
in business-customer relations,							7 8 - 7 9
of employees to their companies,
	8 0 - 8 4
M
Macbeth			(Shakespeare), 188
major, college students' choice of,							1 4 1 - 4 2

manufacturer' s suggested retail price

( M S R P ) , 3 0 , 4 5
marketing:
high price tag and,		2 4 - 2 5
hype of, related to		satisfaction
derived	from p r o d u c t , 1 8 6 - 8 7 ,
1 9 0 - 9 1
relativity	and, 1 - 6 , 9 - 1 0
"trial" promotion s		and, 1 3 6 - 3 7
zero cost and, 4 9 - 5 0
m a r k e t n o r m s , 6 7 - 8 8
companies' relations with their
customer s and,		7 8 - 8 0
companies' relations with their
employees and,		8 0 - 8 4
doing away with, 8 6 - 8 8
education and, 8 5
mere mention of money and,

7 3 - 7 5

mixin g signals of social n o r m s and, 6 9 , 7 3 - 7 4 , 7 5 - 7 7 , 7 9 , 2 1 4

reducing emphasis on, 8 8

social n o r m s kept separate from , 6 7 - 6 9 , 7 5 - 7 6 , 7 7 - 7 8

willingness to risk life and, 8 4

working	for gifts and, 7 2 - 7 4
working	under social n o r m s	vs.,
6 9 - 7 2
M a r y l a n d Judicial T a s k F o r c e ,		2 1 0

M a z a r , N i n a , 1 9 6 - 9 7 , 2 0 6 , 2 1 9 - 2 0 , 2 2 4 , 2 6 4

M c C l u r e , S a m , 1 6 6 - 6 8

M e a d , Nicole,		7 4 - 7 5
medical	benefits, recent cuts in, 8 2
medical	c a r e ,	see health c a r e
medical	profession:

decline of ethics and values in, 2 1 0 salaries of, as practicing physicians vs. Wall Street advisers, 1 8 - 1 9

m e m o r y of previous prices, price changes a n d , 4 6 - 4 7

M e n c k e n , H . L . , 18

menu pricing, in restaurants , 4 Mills, J u d s o n , 6 8

mistakes, repeated, and failure to learn

from experience,	xvii
M I T Sloan School of	M a n a g e m e n t ,
9 2

275

I n d e x

m o n e y:
benefits of,	8 6
dishonesty	with n o n m o n e t a r y objects

vs., 2 1 7 - 3 0

doing away with, 86—88

i m p a c t of mere mention of, 7 3 - 7 5 switch away f r o m , to electronic

instruments , 2 3 0

M o n t a g u e , L a t a n é , 1 6 6 - 6 8 M o n t a g u e , R e a d , 1 6 6 - 6 8

m o r a l b e n c h m a r k s , dishonesty c u r b e d

	by contemplation					of, 2 0 6 - 9 , 2 1 3
morality:
in	"cold" vs. arouse d state,							9 4 - 9 5 ,
	9 6 , 9 7
see		also	cheating on tests;					dishonesty;
	honesty
m o r t g a g e s , 6 0
Moseley,			J . B . , 1 7 4 - 7 6
movie reviews, enjoyment affected by,
	1 6 6
m u m m y powder,					1 7 7 - 7 8
m u s e u m s , free - entranc e days o r times
	at, 61
N
need for uniqueness, ordering food									o r
	drinks a n d ,				2 3 7 - 3 8
New	England			Journal		of	Medicine,		175
New	York		Times,		4 , 1 8 ,		2 1 , 1 2 2 - 2 3
Niskanen , W i l l i a m A . ,						2 0 5 - 6
" N o	Child Left Behind" policy, 8 5
N o r t o n , M i k e , 1 3 5
nucleus a c c u m b e n s , 2 0 3 , 2 0 8
O
o a t h s , honesty				a n d , 2 0 8 - 9 , 2 1 1 - 1 3 ,					2 1 5
Ofek,		Elie, 1 5 9 - 6 0 , 2 6 4
online		auctions,			1 3 5 - 3 6
o p e n - s o u r c e software ,						81
options,			1 3 9 - 5 3
a b u n d a n c e of,					in m o d e r n d e m o c r a c y ,
	148
aversion to loss a n d ,						1 4 8 - 4 9
college			students' choice of m a j o r and,
	1 4 1 - 4 2
consciously				closing,		1 5 0 - 5 1
"door g a m e " and, 1 4 3 - 4 8

downside of, 1 4 0
i m p o r t a n t , vanishing of, 149
r o m a n t i c relationships	and,		1 4 2 , 1 4 8 ,
1 5 0
sale prices and, 1 4 8 - 4 9
similar, choosing between,			1 5 1 - 5 3
X i a n g Yu's story and,	1 3 9	- 4		0
ordering food o r drinks,	2 3 1	- 3		8
enjoyment of choices and, 2			3 2 ,

2 3 5 - 3 6 , 2 3 7 , 2 3 8
need for uniqueness and, 2 3 7 - 3 8
out loud	vs. in private, 2 3 1 - 3 2 ,
2 3 3 - 3 6 , 2 3 7 - 3 8
strategy for, 2 3 8
O r h u n , Yesim , 1 3 6 , 2 6 4 - 6 5
osteoarthritis, a r t h r o s c o p i c knee
surgery and, 1 7 4 - 7 6
outsourcing, 8 1 - 8 2
ownership,	1 2 7 - 3 8
aversion to loss and, 1 3 4 , 1 3 7 , 1 3 8
Duk e University		basketball	tickets
a n d , 1 2 7 - 3 3
of points	of view,	1 3 7 - 3 8
pride of, putting wor k into			something

a n d , 1 3 5

"trial" promotion s and, 1 3 6 - 3 7 value in owner's eyes increased by,

1 2 9 - 3 5
virtual, online auctions and, 1 3 5 - 3 6
P
pain, experience of,	xiii - xiv, x v i - x v i i
e x p e c t a t i o n and,	179

painkillers:

epidural, during childbirth, 1 0 3 - 4 price and efficacy of, 1 8 0 - 8 4

passion:
underprediction of effect of,			9 8 - 9 9
see also	arousal
pay, see compensation ; salaries
pearls, 2 3 - 2 5
black, d e m a n d for, 2 4 - 2 5 ,		2 6
Pepsi, taste tests of C o k e and,		1 6 6 - 6 8
perception:
expectation s a n d , 1 5 5 - 7 2 ; see			also
e x p e c t a t i o n s ; taste
inherent biases in, x v i - x v i i
Perfectly	Legal ( J o h n s t o n ) , 2 0 4

276

I n d e x

personal lives:
arbitrary coherence and, 4 3 - 4 5
separation of social and m a r k e t
norms and, 6 7 - 6 9 , 7 5 - 7 6 ,	7 7 - 7 8
petroleum geologists, decline of ethics
and values among , 211
pharmaceuticals, 2 1 0
marketing hype and efficacy	of,
1 9 0 - 9 1
price and efficacy of, 1 8 0 - 8 4 ,	1 9 0
Pittinsky, T o d d , 169
Pittman, B o b , 6 0
placebo effect, 1 7 3 - 9 4

author's experience with Jobs t suit a n d , 1 9 2 - 9 4

conditioning and, 179 energy drinks and, 1 8 4 - 8 7

faith in drug, procedure , or caregiver a n d , 1 7 9

Gerbi's w o r m secretions and, 1 7 7 knowingly treating patients with,

1 8 7 - 9 0

marketing hype and, 1 8 6 - 8 7 , 1 9 0 - 9 1 moral dilemmas in experiments on,

1 9 1 , 1 9 4

m u m m y powder	and, 1 7 7	- 7 8
origin of t e r m , 1	7 6 - 7 7
pharmaceuticals and, 1 8 0		- 8 4 , 1 9 0

power of suggestion and,	1 7 8 - 7 9
price and, 1 7 6 , 1 8 0 - 8 7 , 1 9 0
royal touch and, 188
surgical procedures and,	1 7 3 - 7 6	, 1 7 8 ,
191
pleasure, spending decisions	and, 4 4
pleasure centers in brain, 168
poetry reading experiment,	4 0 - 4 2
points of view:

expectations and, 1 5 5 - 5 7 ownership of, 1 3 7 - 3 8

pork-barrel spending, 2 0 4 - 5 Prelec, Drazen, 2 6 , 27, 3 9 , 2 6 5 presentation, taste of food and, 165

preventive medicine, 1 1 0 - 1 1 , 1 1 7 - 2 1 see also health c a r e

prices:

anchoring and, 2 5 - 3 6 , 4 5 - 4 7 arbitrary coherence and, 2 6 - 3 0 ,

4 5 - 4 7

d e m a n d and changes in, 4 6 - 4	7
high, desirability of a produc t	and,

2 4 - 2 5

of housing, 3 0 - 3 1

implied difference in quality and, 1 8 0

manufacturer's suggested retail

( M S R P ) , 3 0 , 4 5
placebo effect		and, 1 7 6 ,	1 8 0 - 8 7 ,
1 9 0
supply and d e m a n d and,			4 5 - 4 6
switching from old to new a n c h o r s
a n d , 3 1 - 3 6
upscale coffee		ambience and, 3 9 ,
1 5 9 - 6 0
see also	FREE!
procrastination,		1 0 9 - 2 6
effectiveness of externa l voice and,
1 1 6 - 1 7 , 118
health c a r e and, 1 1 0 - 1 1 ,			1 1 7 - 2 1
recognizing and admitting problem
with,	1 1 5 - 1 6
r o o t of w o r d ,		111

routine automobile m a i n t e n a n c e and, 1 1 9 - 2 1

setting one's o w n deadlines and, 1 1 2 - 1 6 , 117, 1 1 8 - 1 9

of university students, 1 1 1 - 1 6 productivity, social n o r m s in workplace

a n d , 8 0 - 8 4

profession, origin of word , 2 0 9

professional	ethics, 2 1 5
attempts at improvement of, 2 1 3 - 1 4
decline in,	2 0 9 - 1 1
professional	oaths , 2 0 8 - 9 ,	2 1 3
purchases, price imprinting and, 3 0
Q
Qin (Ch'in) dynasty, 1 3 9
R
R a p p , Gregg, 4
rational e c o n o m i c model,		x i x , x x ,
2 3 9 - 4 0

reciprocity, social vs. m a r k e t n o r m s a n d , 6 8 - 6 9

regulations, self-destructive behaviors restrained by, 118

277

I n d e x

relativity, 1 - 2 1

bread - makin g machines and, 1 4 - 1 5 changing focus from n a r r o w to wide

a n d , 1 9 - 2 0

controlling circles of c o m p a r i s o n and, 1 9 , 2 1

dating and, 1 0 - 1 4 , 15

dealing with problem of, 1 9 - 2 1 decoy effect and, 5 - 6 , 8 - 1 5 Economist subscription offers and,

1 - 3 , 4 - 6 , 9 - 1 0

house purchases and, 8 - 9 , 19 jealousy and envy springing from ,

1 5 - 1 9

prices for various product s and, 2 9 restaurant menu pricing and, 4 salaries and, 1 6 - 1 9

television pricing and, 3 - 4 tendency to c o m p a r e things that are

easily c o m p a r a b l e and,	8 - 9
vacation planning and, 10
visual demonstration of,	7

relocation, anchoring to housing prices

a n d , 3 0 - 3 1
restaurants:
with lines to get in, 3 6 , 3 7
menu pricing of,		4
ordering in, 2 3 1 - 3 8 ; see also			ordering
food	or drinks
social n o r m s of dating and,			75-76
robberies,	1 9 5
r o m a n t i c relationships:
options	in, 1 4 2 , 1 4 8 , 1 5 0
separation of social and m a r k e t
n o r m s and, 6 9 ,		7 5 - 7 6
see also	dating
royal touch, 188
Rustichini, Aldo,		76-77

S

safe sex, 1 0 0 - 1 0 2

and willingness to engage in unprotected sex when aroused , 8 9 , 9 5 , 9 6 - 9 7 , 9 9 , 1 0 7

salaries, 1 6 - 1 9 , 8 8

of C E O s , 1 6 - 1 7 , 18

c o - w o r k e r s ' comparison s of, 16 happiness and, 1 7 - 1 8

and move from hourly rates to monthly pay, 8 0

performance - based , in education, 8 5 relinquishing d r e a m s for increase in,

1 8 - 1 9

"save m o r e t o m o r r o w " mechanism

a n d , 2 4 2
willingness to risk life and, 8 4
see also	compensation
sale prices,	1 4 8 - 4 9

relativity and, 1 9 - 2 0

Sarbanes - Oxley Act of 2 0 0 2 , 2 0 4 , 2 0 5 - 6

savings,	1 0 9 - 1 1
decline	in	rate of, 1 0 9 - 1 0
defeating		procrastination in, 1 2 2 - 2 6
for retirement, from perspective of

standard economics vs. behavioral economics , 2 4 1

"save mor e t o m o r r o w " mechanism a n d , 2 4 2

self-control credit c a r d and, 1 2 3 - 2 6 Sawyer, T o m , 2 4 - 2 5 , 3 9 - 4 0 , 4 2 - 4 3 Schmalensee, R i c h a r d , 9 2

schools:

soda machines at, 2 0 4
see also	education
second price auctions, 2 8 n
Securities and E x c h a n g e Commission
( S E C ) ,		2 0 5
self-control,		1 0 9 - 2 6
credit card s and,			1 2 3 - 2 6
decline	in savings		rate and, 1 0 9 - 1 0
effectiveness of external voice				and,
1 1 6 - 1 7
procrastination of university				students
a n d , 1 1 1 - 1 6

self-destructive behaviors, regulations

o n , 1 1 8
self-herding,	3 7 - 3 8
self-reliance,	6 8
thinking about money and, 7 4 - 7 5
self-shame, debt blogging and,			1 2 2 - 2 3
sensei (martial arts m a s t e r ) ,		offering
pay t o , 7 1 - 7 2
sex:
and likelihood of engaging		in
i m m o r a l	behaviors, 9 4 - 9 5 ,		9 6 , 97,
1 0 7

278

I n d e x

a nd preferences in "cold" vs. aroused

state, 89 , 9 4 , 9 6 ,	9 7 , 1 0 6
safe vs. unprotected, 89, 9 5 ,		9 6 - 9 7 ,
9 9 , 1 0 0 - 1 0 2 , 1 0 7
in social vs. market context ,		6 8 - 6 9
as taboo subject for study, 9 2
sex education, 101
sexual arousal:
decision making under, 8 9 - 1 0 2 ,
1 0 6 - 8
see also arousal
Shakespeare, William,	x v i i i - x i x , 1 8 8 ,

2 3 2 , 2 3 9 - 4 0

Shampanier, Kristina, 5 1 , 2 6 5
Shin,	Jiwoong, 1	4 2 - 4 3 , 1 4 7 , 2 6 5 - 6 6
Shin,	M a r g a r e t ,	169
shipping, FREE! on orders over a certain

a m o u n t , 5 8 - 5 9 , 6 2 Shiv, B a b a , 1 8 1 , 2 6 6 Shultz, H o w a r d , 3 9

Sicherman, N a c h u m , 7 1 - 7 2 Silva, J o s e , 114

Simonsohn, Uri, 3 0 - 3 1 Sinclair, Upton, 2 2 7 Skilling, Jeffrey, 2 1 9 , 2 2 3

Skype accoun t of author, theft from,

2 2 4 - 2 6

S m a r t C a r d s , 1 2 4
Smith, A d a m , x x ,	1 3 3 , 1 3 8 , 2 0 2 , 2 1 4
SoBe Adrenaline Rush experiments,

1 8 4 - 8 7

social n o r m s , 6 7 - 8 8 Burning M a n and, 8 6 - 8 8

companies' relations with their customers and, 7 8 - 8 0

companies' relations with their employees and, 8 0 - 8 4

education and, 8 4 - 8 6

friendly requests and, 6 8 , 7 0 - 7 1 , 7 3 - 7 4 , 7 7 - 7 8

giving greater emphasis to, 8 7 - 8 8 market norm s kept separate from,

6 7 - 6 9 , 7 5 - 7 6 , 7 7 - 7 8

mere mention of money and, 7 3 - 7 5 mixing signals of market n o r m s and,

6 9 , 7 3 - 7 4 , 7 5 - 7 7 , 7 9 , 2 1 4

offering	to pay for Thanksgiving
and,	6 7 - 6 8 , 76

return to , onc e m a r k e t n o r m		is
removed, 7 7
r o m a n t i c	relationships and, 6 9 ,		7 5 - 7 6
willingness to risk life and, 8 4
working	for gifts a n d , 7 2 - 7 4
working	under m a r k e t n o r m s	vs.,
6 9 - 7 2
social policy, p o w e r of FREE! a n d ,			6 2 - 6 3
S o c r a t e s , 4 4
sounds, annoying, anchoring

experiments with, 3 1 - 3 6
sports, expectation s and perception of,
155-56,171
Starbucks,	3 7 - 3 9
moving a n c h o r from Dunkin'					Donut s
t o , 3 7 - 3 9
moving up to higher price bracket at,
3 8 , 4 7
State F a r m ,	7 8
stereotypes,	1 6 8 - 7 1
behavior of people not p a r t				of
stereotyped grou p affected					by,
1 6 9 - 7 1
behavior of stereotyped			people
affected		by, 168
purpos e of,		168
Stevenson, R o b e r t L o u i s ,			9 8
subscription pricing, 1 - 3 , 4 - 6 ,				9 - 1 0
superego, 2 0 3 - 4 , 2 0 8
supply and	d e m a n d :

m e m o r y of previous prices and, 4 6 - 4 7 in standar d e c o n o m i c f r a m e w o r k ,

4 5 - 4 6 surgery, 2 1 0

placebo effect and, 1 7 3 - 7 6 , 1 7 8 , 19 1 price and efficacy of, 176

Sutton, Willie, 2 3 0 Sweeney, Dennis M . , 2 1 3

T
taste, 1 5 7 - 6 8
of	beer, expectation s	and,		1 5 7 - 5 9 ,
	1 6 1 - 6 2 , 1 6 3 - 6 4 , 1 7 2
of coffee, upscale ambience				and,
	1 5 9 - 6 0
of	C o k e vs. Pepsi, 1 6 6 -		6 8
depth of description		in	caterers'
	offerings and, 1 6 4

279

I n d e x

ta s te (continued)

e x o t i c - s o u n d i ng ingredients and, 1 6 4 - 6 5

presentation and, 16 5 wineglasses and, 16 5

t a x e s , 2 0 4 cheating on, 1 9 6

d e m a n d impacted by, 4 6 - 4 7

teenagers:
safe driving	and,		1 0 2 - 3
sexual activity of,			9 0 , 1 0 0 - 1 0 2
television:
cable, "trial" promotion s					and,
1 3 6 - 3 7
relativity and displays of,					3 - 4
Ten C o m m a n d m e n t s ,				1 6 , 2 0 7 - 9 , 2 1 3 ,
2 1 6
tests:
standardized,		8 5
see also cheating on				tests
T h a l e r , Dick,	1 2 9 , 2 4 2
Thanksgiving,	offering to pay for,
6 7 - 6 8 , 7 6
3 0 - d a y money - bac k			g u a r a n t e e s ,
1 3 7
T h o r e a u , H e n r y David, 121
Tomlin , D a m o n ,		1 6 6 - 6 8
"trial" p r o m o t i o n s ,			1 3 6 - 3 7
Tversky, A m o s , 19
Twain , M a r k , 2 4 - 2 5 ,				3 9 - 4 0 , 4 2 - 4 3
two - cycle billing, 2 2 8
U
uniqueness, need		for,		2 3 7 - 3 8

university students:
choice of majo r by, 1 4 1		- 4 2
procrastination a m o n g ,			1 1 1	- 1 6
V
vacation planning, 10
V e l a d o n e - R x	experiment ,		1 8 1	- 8 4
ventromedial	prefrontal c o r t e x

( V M P F C ) , 16 7

Vickrey, William,		2 8 n
violence,	political	points of view and,
1 5 6	- 5 7

virtual ownership, online auctions and,

1 3 5 - 3 6
Vohs, Kathleen, 7 4 - 7 5
volunteering, 71
vulnerabilities, awareness of,	4 4
W
W a b e r , R e b e c c a , 181 , 1 8 2 - 8 3 ,	2 6 6
wardrobing, 1 9 6 , 2 2 3
Weisberg, R o n , x v
W e r t e n b r o c h , Klaus, 1 1 2 , 2 6 6

W h i t m a n , W a l t , 4 0 - 4 1

" W h o e v e r you are holding me now in hand" ( W h i t m a n ) , 4 0 - 4 1

W i l l i a m s - S o n o m a , 1 4 - 1 5 wineglasses, taste affected by, 165 wine prices, 2 6 - 2 7 , 2 9

W i n s t o n , H a r r y , 2 4 working:

activity transformed into, by compensation, 3 9 - 4 3

blurring of partition between leisure a n d , 8 0 , 8 1

for free, 71

for gifts vs. payment, 7 2 - 7 3

under n o n m o n e t a r y social norm s vs. m a r k e t n o r m s , 6 9 - 7 2

W r a y , Nelda, 175 X

X i a n g Y u , 1 3 9 - 4 0

Y

Y o u n g , J i m , 21

Z
zero,	4 9 - 6 3
on food		labels, 6 1 - 6 2
history of,			5 0
see	also	F	R E E !

280