Indeed, although this is a blog primarily about investing, I was so impressed by the book that I'm persuaded to recommend it here (pun intended). It is not entirely unrelated however, as some of the lessons it contains such as the consistency and scarcity principles are quite applicable to investment decisions, and it is curiously part of the Collins Business Essentials. Originally published in 1984, the 2006 revised edition is updated to reflect new findings about the process of influence, and at the end of each chapter, Cialdini discloses letters that readers have written to him about their personal experiences.
Like many people, Cialdini admits that 'All my life I've been a patsy', so as an experimental social psychologist, he spent 35 years conducting experiments into how people think and what makes them likely to be persuaded. In addition, he spent three years going undercover by applying for jobs in fields such as real estate, user car dealerships, advertising, public-relations, fund-raising, telemarketing and restaurants. These insights into how the professionals get us to say 'yes' provide a nice demonstration that what works in experiments applies equally well to the real world. Cialdini's writing style is easily understandable and humorous, but fortunately doesn't patronise readers by oversimplifying. My only criticism is that he tends to be a little repetitive in drilling home the results of an example or the message he's trying to convey, but overall the book is a pleasure to go through.
Influence: The Psychology of Persuasion details six very powerful principles, one per chapter:
2. Commitment and Consistency
3. Social Proof
These principles usually work to our great benefit, but our regular reliance on them may cause lapses in judgement, especially when someone is intentionally exploiting them. Although some may seem obvious, I think you'll be surprised how powerful they are once you read example after example of their applications. By understanding how these principles work, you can use them yourself to help persuade others (hopefully with good intentions), or you can avoid being led into unwanted situations (Cialdini explains 'How to say no' at the end of each chapter). Interestingly enough, even though I'm planning on pursuing a major in psychology - as well as finance and accounting - my first few weeks of social psychology have made no mention of any of these principles.
Using these principles, Cialdini explains why a woman in New York was chased and stabbed to death while 38 of her neighbours watched on without calling the police or intervening, why the number of airplane crashes and automobile fatalities shoots up after a highly publicised suicide story, and how a cult leader got more than 900 people to kill themselves in an orderly fashion by passing around a vat of poison. To find out the tragic and disturbing reasons for these extreme examples, you'll have to read the book!
In summary, if this was a broker report, my recommendation would be BUY.