The 11 Ways That Consumers Are Hopeless at Math

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Business - Derek Thompson - The 11 Ways That Consumers Are Hopeless at Math - The Atlantic

(7) We're easily made dumber by alcohol, time, decisions.

When you're young and drunk at a bar, you're more likely to do stupid things with strangers. "Am I fully assessing this complex romantic situation?" is a difficult question to answer on seven glasses of wine, so we're more likely to ask ourselves a simpler question: "Is s/he hot?"

When we're drunk, stressed, tired, and otherwise inattentive, we're more likely to ask and answer simple questions about buying things. Cheap candy bars and gum are situated near the check-out at grocery stores because that's where exhausted shoppers are most likely to indulge cravings without paying attention to price.

Boozy lunches are good for deal-making because alcohol narrows the range of complicating factors we can hold in our heads at once. If you want somebody to take an under-examined risk, get him boozed, tired, or ego-depleted.
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(3) We're terrified of extremes. We don't like feeling cheap, and we don't like feeling duped. Since we're not sure what things are worth, we shy away from prices that appear too high or too low. Stores can employ our bias for moderation against us. Here's a great story:

People were offered 2 kinds of beer: premium beer for $2.50 and bargain beer for $1.80. Around 80% chose the more expensive beer. Now a third beer was introduced, a super bargain beer for $1.60 in addition to the previous two. Now 80% bought the $1.80 beer and the rest $2.50 beer. Nobody bought the cheapest option.

Third time around, they removed the $1.60 beer and replaced with a super premium $3.40 beer. Most people chose the $2.50 beer, a small number $1.80 beer and around 10% opted for the most expensive $3.40 beer.
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In short: We are all Goldilocks.
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There's some good marketing insight buried in that article.

I like a lot of Thompson's stuff. He makes me think of things I might not have thought about otherwise.
 
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Interesting article. Dan Ariely has done some solid work on this:

Dan Ariely (although his more recent stuff is on truth, lies and ethics)

If you haven't seen it already, his book Predictably Irrational is worth checking out.
 
i agree i have noticed and remarked to friends a few times about people not wanting to buy the cheapest options out there. That you could make a fake expensive product to market your better priced option, even if it were the exact same thing, just labelled differently.
 
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Can this be true? I've always thought it made me smarter and a much better driver. There are no startling revelations here, just common knowledge and being aware/alert as an informed, intelligent consumer but not meaning to rain on the thread, a mention of marketing strategies, tricks and tactics is always a welcome reminder, lest we forget.
 
Checkout Dan Ariely's TED talk for some good examples of irrational decision making:

[ame=http://www.youtube.com/watch?v=9X68dm92HVI]Dan Ariely asks, Are we in control of our decisions? - YouTube[/ame]
 
Why do my testicles smell like peanuts today? It's so good it's almost intoxicating.
 
When you're young and drunk and horny at a bar, you're more likely to do stupid things with strangers. "
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Fixed.





But seriously, that's a great article. And with every point the author made I kept thinking about stuff I learned from Ca$hvertising. Pain sells, just focus on the right pain.
 
This should be the type of stuff they teach at schools. I know I occasionally make these stupid mental shortcuts, but I consciously try really really hard to be aware of what tricks my brain is playing on me when I'm buying things.


"[Warranties] make no rational sense," Harvard economist David Cutler told the Washington Post. "The implied probability that [a product] will break has to be substantially greater than the risk that you can't afford to fix it or replace it. If you're buying a $400 item, for the overwhelming number of consumers that level of spending is not a risk you need to insure under any circumstances."
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People occasionally ask me for advice buying a computer and I always tell them not to buy the warranty because and this is always the first thing I tell them. And then they end up buying the warranty anyways and wasting $200 on a warranty for a $900 laptop.
 
ayzo said:
Checkout Dan Ariely's TED talk for some good examples of irrational decision making:

Dan Ariely asks, Are we in control of our decisions? - YouTube
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Dans book is awesome and some other dude has a sort of similiar book [ame=http://www.amazon.com/dp/1592406599/?tag=hyprod-20&hvadid=15474760779&hvpos=1o1&hvexid=&hvnetw=g&hvrand=1404882436156733494&hvpone=&hvptwo=&hvqmt=&ref=asc_df_1592406599]Amazon.com: You Are Not So Smart: Why You Have Too Many Friends on Facebook, Why Your Memory Is Mostly Fiction, and 46 Other Ways You're Deluding Yourself (9781592406593): David McRaney: Books[/ame] but it's not as good as Predictably Irrational
 
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