We are all motivated by “free.” But free is more than just a low price. In a new book Predictably Irrational , behavioral economist Dan Ariely of MIT tests how humans respond to free. In discussing free, he uses the example of how Amazon’s sales really took off when they began offering free shipping for orders over a certain level. Everywhere but France. On investigation, Amazon management found that in France, the country manager decided to do the promotion a little differently by offering shipping for one franc (in the US, it might be the same as offering shipping for 50 cents. ) But one franc did not elicit the same irrational response as free. When they changed the offer to free, they had the same response as everywhere else – spectacular sales growth. The bulk of the book is actual experiments that he performs with different age groups to understand how we all behave.

Responding to free is only one of several irrational behaviors he investigates. He looks at how honest we all are, how we react to irrelevant environmental clues, even how adolescent boys change their behavior when they are excited and many others.

This is my new favorite book. It defies categorization. The bookstore where I found it had it categorized in Self Help. For me, it belongs in the Business, except that many books in this section are (forgive me) boring. This book is anything but boring. It is an easy read. The author has a dry sense of humor and playfulness that makes the science of his investigations seem like fun. I think it is really a science book … the science of Behavioral Economics. I suspect most bookstores do not have a section for behavioral economics, so you might have to ask.

I believe any small business owner who reads this book will find plenty of ides for their business. This is a must read.