Bits and pieces

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.