Definition: The tendency of one purchase to lead to another. Obtaining a new possession often creates a cycle consumption.
Example: New dress --> new shoes and earrings.
Example: New sofa --> new furniture to match.
Insight: Actions cue other behaviour. We often decide what to do based on what we have just finished doing (routine).
Insight: We can use the connectedness of behaviour to our advantage to build new habits, by habit stacking - linking new habits to other already embedded habits.
Reference: The Effect is named about French Philosopher Denis Diderot. Diderot lived a lot of his life in poverty. He was the writer of Encyclopédie. Catherine the Great loved the book, and heard about is financial troubles, she offered to buy his personal books. Diderot suddenly had wealth. He bought a scarlet robe. The robe was beautiful. This led to other purchases as Diderot sought equal beauty in the other material items in his life. Diderot quickly fell back into having no money.
Definition: The tendency of one purchase to lead to others.
Example: New puppy --> dog toys.
Example: Fishing rod --> tackle and gear.
Insight: Clothing purchases are particularly susceptible to the Diderot Effect
Principle: Actively work to create an anti-diderot effect by reducing clothes.
Reference: Named after the 18th century French Philosopher Diderot.
 
Key Insights & Principles
Personal Finance & Habits
Obtaining new possessions often leads to other purchases and cycles of consumption and spending.
Actions cue other behaviours.
We can build positive habits by linking new habits to existing ones.
Actively work to create an anti-Diderot Effect by regularly minimising material items.
Use actions to cue positive behaviour by habit stacking.