If you are interested in behavioral economics or simply oddities of our consumer amuse you, I recommend Dan's book is Ariel (really) I decide . A pure gem of humor, funny experiments and especially a good lesson in humility when it comes to our understanding of consumer behavior. Right price, rational choices, decisions under uncertainty, ethical all our alleged economic rationality and it spends its spring book with the delightful feeling of ê still be a little more interesting than the simplistic models in which economic theory attempts to reduce us.
Are you Lindt or Hershey?
The theme of free seemed particularly intriguing. Ariely notes archly that free makes us a little crazy: he only has to see the packed crowd at museums, first Sunday of each month when entry is FREE Paris. To save a few dollars, people are willing to lose a lot of time (as if it had no value) to visit exhibitions saturated with visitors, while n & # 39, y had probably not many people the day before or the week after. And not to be a marketing ace known for the power of seduction of unlimited formulas. The movie passes or passes of the Internet (or mobile) have really taken off were when offered unlimited plans.
Ariely has designed the following experiment to test the difference between a ridiculously low price and completely free: on a stand, he proposed choice of a premium chocolate (Lindt of) 15 cents or a low-end (a Hershey) for 1 penny. 73% of consumers preferred to pay 15 cents to Lindt. The next day, he offered the Lindt to 14 cents and the Hershey Free. To the great surprise of researchers, people chose this time to 69% a Hershey! However, a discount of 1 cent on the two products should not normally change the benefit - cost analysis between the two options and should have no influence on consumer choice:
Suppose that Lindt provides 50 units of pleasure only 5 cons for Hershey.
Pay 15 cents for Lindt provides a net profit of 50-15 = 35 5-1 = 4 cons for Hershey. Lindt advantage.
The next day, Lindt offers a net profit of 50-14 = 36 5-0 = 5 cons for Lindt. Advantage unchanged for Lindt!
The same experience happens when the Hershey cents from February to January was not the same effect. The irresistible attraction of free therefore failure is the classic model of cost-benefit analysis. Ariely explains the psychological effect the lack of risk taking that means free. "In my opinion, he writes, because human beings have an inherent fear of the loss. In choosing a free product, there was obviously nothing to lose. However, if one is interested in an article in charge, then, yes, we risk making a bad decision - And end up losing. Therefore face a choice, prefer the free product. "Pay 15 cents for Lindt provides a net profit of 50-15 = 35 5-1 = 4 cons for Hershey. Lindt advantage.
The next day, Lindt offers a net profit of 50-14 = 36 5-0 = 5 cons for Lindt. Advantage unchanged for Lindt!
And if everything was a matter of ratio?
There may be some truth in this thesis, but personally I would go for a more direct explanation. If the traditional analysis of earnings calculated as the difference between perceived value and cost is at fault, it may simply be that and is not good. I suspect we reason in terms of "ROI" (gain / expenditure) rather than "net income" (gain-cost). So that when the expenditure is zero yield becomes infinite and our decision criteria panic! That's why we resumed the chocolate mousse at the Bistrot Romain until it make you sick. As long as no hidden costs not reintroduced a denominator non-zero, "Free beats Fee" and we prefer the free to anything else. This hypothesis
report gain / expenditure as a criterion for decision pleases me well for several reasons. First, it is consistent with other observations paradoxical. According to the classical theory is eaten anything that seems interesting, as soon as the utility exceeds the cost. If it was If we do not observe much difference between purchase intentions measured in marketing research and actual sales of products once marketed ;. My hypothesis explains this difference very easily: it buys only when the benefit / cost seems high enough, beyond d & # 39, a decision threshold may vary depending on our mood, context ... and state of our finances. The gap between interest and purchase decision is quite understandable.
This explanation is also in line with the loss aversion evoked Ariely. The classical theory predicts that the same thing to spend 10,000 euros for something that is worth 10,100, than to spend 100 for a property that is 200. It is clear that this is not natural. If instead the introduction of the act depends on the ratio gain / expenditure plus expenditure, the greater the benefit should be important to decide to buy, which is consistent with intuition .
My hypothesis would explain the paradox the passage of the radio which I talked about in this post : it does not bother us to go to the ; other side of town to save 30 euros on a car that is 100, but you can not do the same thing to save 30 euros on buying a car (with car) worth 30,000 euros. The yield displacement is 30% in the first case but falls to 30 / 30000 = 0.1% in the second. Our instinctive reaction could not be more rational view from this angle. 30 euros and 30 euros are not equal in all circumstances!
Weber's Law in economics-Xochipilli
The best argument in favor of my hypothesis is that it is consistent with the rest of our rating system innate. We saw in this post , either for the height of sounds, the loudness (decibels), light intensity, weight, pain, pleasure, durations, number etc.. comparing two quantities by evaluating their relationship, not by measuring their difference. Our physiological system is not very sensitive to the absolute values (absolute ear for music is exceptional). According to Weber's law we perceive only relative values And we consider the sizes in proportion to each other. Strange as it may sound, our sense of proportion is natively "logarithmic". Conversely, the "subtraction" We are not natural. Addition and subtraction arithmetic recent inventions, dating back at most a few thousand years, when the rise of agriculture imposed counting pre precisely rather than roughly estimate quantities. Assume evaluate consumer preferences with the same tools as the rest of his sensations seems to me ultimately not unreasonable at all. After all Homo Sapiens Homo Economicus rest!
Sources: Dan Ariely
It's (really?) I decide (Flammarion 2008)
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