Examples: Everyone trying to cheat on taxes, arriving at parties an hour after the stated time, driving above the speed limit.
Examples: The use of QWERTY keyboards.
Insight: Reasons for inferior standards may be behavioural rather than technological.
Insight: Moving from one equilibrium to another is achieved most effectively by short and intense campaigns - by getting a critical mass of people to switch.
Insight: Individuals cannot change social convention.
Reference: Brian Arthur, Stanford economist refers to the adoption of gasoline powered vehicles in 1890s over electric or steam.
Insight: When people hear the same story everywhere, they often assume it must be true, then they are more likely to repeat it, and then hear it again from others, reinforcing the belief that it is true.
Insight: Inaccurate information can turn quickly into consensus through the bandwagon effect.
Insight: Practices and traditions may be followed merely because we think that other people like it, or will respect us for it, not because they are what is best for the individual.
Insight: Sometimes a small disruption (a Nudge) can dislodge a long held practice or idea because it starts a bandwagon effect. An example is communism in the former Soviet bloc.
Example: Getting employees to switch from a legacy system to another, might require getting them to realise that the majority of people have adopted and are happy with the new system.
Insight: People are motivated to follow other people's behaviour.
Definition: Humans have a tendency to feel that "if everyone else believes it, it must be true".
Insight: Echo chambers (through social media groups) give people the impression that everyone shares the same opinion, which makes people stop questioning whether things are true or not.
Definition: When people like things because they think other people like them.
Example: The success of the later Star Wars movies can partly be attributed to the success of the Star Wars brand, which already has a large following.
Key Insights & Principles
Decision Making
The decisions and actions of the majority might not be what is best for us.
Commonly held beliefs are not always true.
Moving from one equilibrium to another is achieved most effectively through getting a critical mass of people to switch.
Take time to evaluate information and make decisions.
Do not rely on the majority to make decisions for you.
