This interesting TED talk shows some patterns we tend to use when we decide, specially in retail, and we should overcome, which are
– Comparing to the past
A) $2,000 travel to Hawaii cuts to $700, we take a week to think it, and when we go, price goes up to $1,500
B) $2,000 travel to Hawaii cuts to $1,600
Most people won’t take A), but will take B) because we compare the price of today with the price in the past, and not the price independently.
– Comparing to other products in the shelve
$27 wine perception changes from average to expensive if placed next to:
$8 wine, $27 wine, $33 wine, $39 wine
$8 wine, $22 wine, $27 wine
– % of saving by travelling:
A) A stereo costs $200, but if we drive to the next city it will cost $100
B) A car costs $40,000, but if we drive to the next city it will cost $30,900
Although saving is equal, most people do A) but not B) because they compare % of savings with costs.
– Impatience of winning in the future:
A) Win $50 now, or win $60 in a month
B) Win $50 in 12 months or $60 in 13 months
People take $50 in A) and $60 in B) although the time of waiting is the same. We tend to get impatient about decisions in the present, but forget about it if it refers to the future.