Welcome to Mental Garden. The following letter is part of our “Distilling Books” collection, in which we extract the most revealing ideas from literature. For the complete library, click here
🏷️ Categories: Behavior, Decision making and biases.
"We believe we are rational, but the truth is that we are affected by so many biases that it’s almost impossible to truly act rationally."
"It is well known that we associate more 'quality' with products that cost more."
"Our brain only knows how to measure by comparison."
"When we consider something ours, we give it far more value than it objectively has."
"People are only honest to the extent that it suits them."
— Dan Ariely in Predictably Irrational.
There’s something you do every day that is sabotaging your life. And you don’t even know it.
It’s not your lack of discipline. Nor anyone you know. It’s you. Or rather, your brain taking shortcuts. Shortcuts that are often useful. Often… Except when they backfire. This article is for you if you’ve ever asked yourself:
Why did I do something so stupid?
Why did I buy that when I didn’t need it?
Why did I agree to this deal if I ended up losing?
Why did I say “yes” when I wanted to say “no”?
Today we’ll uncover 10 mental traps you fall into daily without realizing it—traps that Dan Ariely, psychologist and economist at Duke University, studied for years and captured in his book Predictably Irrational. Understanding them will help you plan smarter—and protect you from those trying to manipulate you.
Let’s dive into the inner workings of the human mind…
1. Everything is relative—even what shouldn’t be
Our brain only knows how to measure by comparison.
We like to think we’re good at estimating the value of things or how long something will take. The truth is, we can’t judge anything without comparing it to past references or memories. Context completely shapes our opinions.
When you see a product priced at €500, it might seem expensive.
But if there’s one next to it for €850, suddenly €500 doesn’t look that bad.
That’s the essence of relativity. Ariely explains it clearly: “The easiest way for our brains to assign value to something is by using prior experience and deciding based on what we’ve seen before.”
1.1. The curious case of the magazine
Ariely describes how he came across a subscription offer from The Economist with these three options:
Digital only: $59
Print only: $125
Print + Digital: $125
Yes, you read that right.
Most people chose the third option. Not because it was objectively better, but because compared to the print-only one… it seemed like a bargain. But when the print-only option was removed… everything changed.
And there’s more…
1.2. The bread machine case
Ariely explains how a company initially struggled to sell their bread makers. To boost sales, they introduced a “deluxe” model that was larger and 50% more expensive than the original.
Sales of the original bread machine skyrocketed.
The deluxe version, with its higher price, made the original one seem like a bargain. Without the expensive model, consumers didn’t know how to judge the product’s value. A pricier version made the other look like a deal.
This is how the anchoring bias is used to manipulate buyers.
2. The amazing phenomenon of "arbitrary coherence"
Price should reflect supply and demand—but our mind doesn’t work that way.
2.1. The social security number experiment
As mentioned, humans need references to make purchases. So Ariely conducted a brilliant experiment showing how the brain assigns value when there’s no reference point. He asked 55 students to evaluate several products.
First, they were told to write the last two digits of their social security number at the top of the sheet listing the items.
Then, they had to write those same digits next to each item—but this time, as if it were a price; for example, "$23" if their digits were 23.
They were asked if they’d be willing to pay that amount for each item. This arbitrary number became the reference.
Finally, they had to indicate the maximum price they’d actually pay for each product in a mock auction.
The result? It was shocking.
Students denied being influenced by their numbers—but the data said otherwise. The higher their digits, the more they were willing to pay. The top 20% (digits 80–99) offered 216% to 346% more than the bottom 20% (digits 1–20).
That’s the power of Ariely’s "arbitrary coherence" theory.
It’s that easy to manipulate demand.
3. The cost of free
“Free” isn’t a price. It’s an emotional trigger.
3.1. The penny experiment
In one experiment, Ariely offered two chocolates:
Lindt truffle: $0.15
Hershey’s Kiss: $0.01
Most people chose the Lindt. But when he lowered both prices by a penny…
Lindt: $0.14
Kiss: $0 (free)
90% chose the Kiss.
Why? Because “free” erases logic. It changes how we think. We feel there’s nothing to lose when the price is 0—but we forget the opportunity cost: the cost of choosing one thing and missing out on others, including time, attention, and better options.
And it’s not just an experiment. The same thing happened to Amazon.
Amazon’s sales skyrocketed when they introduced free shipping. In every country… except France. Why? Because shipping there cost 20 cents. Once it dropped to 0, sales took off like everywhere else.
That’s how easily you can change someone’s decision.
4. Emotional exchange vs. monetary exchange
Has a friend ever offered to pay you for helping with a tough task? Did it feel awkward? That’s the difference between emotional and monetary exchange.
We live in two systems, and mixing them gets messy.
4.1. The case of the lawyers and retirees
Ariely demonstrated this with lawyers:
They were asked to work with low-income retirees for $30/hour. Most said no.
Then they were asked to do it for free. Most said yes. Same action, different price.
It’s hard for us to mix altruism with money.
4.2. The “money mindset” experiment
This one really struck me.
Participants were asked to rearrange jumbled words into coherent sentences.
One group worked with neutral phrases (like “It’s cold outside”).
The other worked with money-related phrases (like “High salaries”).
Then they were given a hard puzzle and told they could ask for help.
The result? Impressive.
Those who had been thinking about “high salaries” took nearly twice as long to ask for help. They were less likely to seek assistance. Just thinking about money was enough to shift their mental framework.
That’s the power of mental priming.
5. Your emotions are in charge (and you don’t even notice)
We like to think we’re rational. But emotions make us derail.
5.1. The arousal experiment
Ariely and George Loewenstein asked University of California students to answer questions about sexual topics in a calm state… and then again while aroused after watching explicit content.
The result? Drastic changes.
25% more likely to skip using a condom
More than twice as likely to lie or betray
Desire, anger, fear… they make us promise things we won’t keep—and make decisions we won’t understand later. Never decide something while you’re emotionally triggered. Your ability to reason is compromised.
Come back to the decision when you’re calm again.
That’s all for today…
The other 5 mental traps from Predictably Irrational (including why we overvalue what’s ours, how too many choices can sabotage us, and how pricing manipulates our perception) will arrive in the next edition of Mental Garden.
Dan Ariely’s book is so full of brilliant experiments and ideas that it deserved a thoughtful read. That’s why I chose to split it into two parts: to properly distill it—and so you could truly enjoy it, with high-quality insights.
Part two will be here in just 2 days.
Until then, examine your decisions with a magnifying glass. You might be surprised…
✍️ Your turn: Which of these biases do you recognize most in your daily life, and what will you do differently next time?
💭 Quote of the day: "We often think we’re the ones holding the reins, the ones in ultimate control of the decisions we make and the direction our lives take; but unfortunately, that perception has more to do with our desires (with how we want to see ourselves) than with reality." — Dan Ariely, Predictably Irrational
See you soon! 👋
References 📚
Ariely, Dan (2008). Predictably Irrational.