Monday, June 3, 2013

Predictably Irrational

Finally finished this book. Nice read. Helps you understand why people don't behave as expected.

Why sometime you buy the 2nd cheapest item. Why its no fun eating out and taking turns ordering to the waiter...

Easy to understand, backed by data, and simple experiments, plus entertaining.

There are interesting case studies, that you can implement yourself.

I tried the Pepsi / Coke Blind test with some adjustments to fit the environment and sample side I had. Of a sample size of 17 students, I first asked them to jot down whether they preferred Pepsi or Coke. Then I asked them to leave the classroom, poured Pepsi and Coke into cups with markings only I understood. The students returned to the classroom and have themselves two cups without knowing which was Pepsi and Coke (but knew that the cups were either Coke or Pepsi).

The results were dramatically different. 1. Firstly when asked to just jot down their preference - 12 prefered Pepsi. 5 preferred Coke. 2. In the blind test, 13 out of the 17 students matched their actual preference and what they preferred in the blind test. There were 4 mismatches, equally divided (2 for coke 2 for Pepsi).

What's your thoughts?

My thoughts - Firstly the test is conducted in Malaysia, where both Pepsi and Coke have a strong brand presence, but maybe Coke's presence is similar to Pepsi. So possibility is that Pepsi has in Malaysia what 'Coke has in USA - a 'mental preference'. Or the sample size really do know their preference, and might be less swayed by marketing....



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