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Phishing for Phools summary
George A. Akerlof and Robert J. Shiller
The Economics of Manipulation and Deception
15 mins
Brief summary
Phishing for Phools by George A. Akerlof and Robert Shiller sheds light on the nature of markets: it exposes their vulnerabilities and how they can be exploited for profit. The authors offer a critique of the free market philosophy and how it can deceive consumers.
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Phishing for Phools
Summary of 6 key ideas
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Key idea 1 of 6
Far from being rational, free markets are full of irrational temptations for the “phool” consumer.
While we like to think of free-market economic systems as places where individuals make mutually-beneficial trades based on rational decisions, the reality is much different.
In today’s free market, people are constantly being phished for phools. But what do we mean by this?
Phishing is a process of getting a person to do something that is in the interest of the “phisherman” but not necessarily beneficial to that person.
Someone who has been successfully phished is then called a phool. And contrary to popular opinion, markets that are based on supply and demand with little to no government interference – essentially free-market systems – are actually ideal phishing grounds.
Yet most economic textbooks will tell you that most buying decisions in such markets are indeed rational. A typical example goes like this: you go to a supermarket to buy apples and oranges. The catch is that you have only a limited amount of money to spend.
The amount of apples and oranges you purchase depends on both the price of the fruit and on your personal preference for either apples or oranges.
But does this example reflect reality? Do we really make our buying decisions based on a rational assessment of a particular good’s price?
Certainly not. Free markets constantly create temptations to exploit consumer weaknesses.
Think about your local supermarket. Where are the eggs and milk located? In all likelihood, they’ve been placed strategically at the back of the store.
As milk and eggs are common items that most people purchase, every customer is forced to walk through the whole store to find them – all the while being reminded of the other things on the store shelves that could be purchased.
We’re also similarly manipulated by our own desires when making purchasing decisions.
For example, companies that sell cake mixes appeal to an individual’s subconscious desire to make something “homemade.” Instead of just including egg in the mix, they require the buyer to add a fresh egg himself, playing on the illusion that with this addition, the cake was made from “scratch.”
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What is Phishing for Phools about?
Phishing for Phools (2015) reveals the ways in which modern free-market systems, so often praised as the epitome of rational exchange, are fueled instead by willful deceit, with the goal of pushing you to act against your self-interest.
Phishing for Phools Review
Phishing for Phools (2015) explores the world of economics and marketing to expose how we are constantly being manipulated and tricked into making decisions that benefit others, not ourselves. Here's why this book is worth reading:
- Offers a fresh perspective on the influence of information flows and the role of manipulation in modern society.
- An eye-opening exploration of the darker side of market competition and how it can lead to unintended consequences.
- By delving into real-world examples and insightful analysis, the book highlights the importance of critical thinking and being aware of the tricks used to profit from our vulnerabilities.
Best quote from Phishing for Phools
The free-market system exploits our weaknesses automatically.
—George A. Akerlof and Robert J. Shiller
Who should read Phishing for Phools?
- Economists or students examining free-market systems
- Any consumer interested in how the market works
- Socially-conscious business owners
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Phishing for Phools FAQs
What is the main message of Phishing for Phools?
The main message of Phishing for Phools is that people are easily deceived and manipulated in the market economy.
How long does it take to read Phishing for Phools?
The reading time for Phishing for Phools varies, but it typically takes several hours. The Blinkist summary can be read in around 15 minutes.
Is Phishing for Phools a good book? Is it worth reading?
Phishing for Phools is worth reading as it reveals how markets manipulate and deceive consumers, making us aware of our vulnerabilities.
Who is the author of Phishing for Phools?
The authors of Phishing for Phools are George A. Akerlof and Robert J. Shiller.
What to read after Phishing for Phools?
If you're wondering what to read next after Phishing for Phools, here are some recommendations we suggest:
- Narrative Economics by Robert J. Shiller
- Emotional Blackmail by Susan Forward with Donna Frazier
- In Sheep’s Clothing by George Simon Jr.
- Brainfluence by Roger Dooley
- Moneyland by Oliver Bullough
- Good Economics for Hard Times by Abhijit V. Banerjee and Esther Duflo
- Thinking, Fast and Slow by Daniel Kahneman
- Never Split the Difference by Chris Voss and Tahl Raz
- How Highly Effective People Speak by Peter Andrei
- Snakes in Suits by Paul Babiak and Robert D. Hare