When I read “Predictably Irrational”, one thing I couldn’t help but wonder is how different the web would be today if, years ago, the initial ad sellers had picked a much higher price for web ads and put effort into ‘justifying’ that anchor.
Sometimes I find it worth it to recognize I’m being manipulated yet go along with it. The most obvious example to me and the most iconic is Coke/Pepsi. I know that the typical person in a blind taste test prefers Pepsi and the general preference for Coke is simply years of marketing weasel success. I happen to have tested myself and can distinguish the two by taste, but that’s not essential to my point here; if I’d never seen a commercial for either odds are I’d prefer Pepsi, it’s just that I can’t be “blinded”. Anyway, I know I’m being irrational usually choosing Coke, but there’s just no payoff for me to fight it. Coke and Pepsi usually cost the same, and even if they didn’t Coke would be worth the premium to me because I do enjoy it more, my reason for enjoying it more notwithstanding. Basically, the marketing weasels won, and there’s no reason for me to fight it.
Reminds me of Edward Bernays’ manipulation in the early 20th century.
http://video.google.com/videoplay?docid=8953172273825999151
I feel manipulated every time I come here. Is that because I’m waiting to see if the blog will revert to its former glory. Seeking counseling…
@James: [political] Do a direct number correlation between the “millions” uninsured and the “millions” unemployed along with the “millions” of (get ready PC term here) undocumented workers.
This issue is not necessarily access overall only a very small percentage, it is one of cost per value when the overall costs have to aggregate the cost of the pro-bono work that is legally required.
Factor in the cost of preventative measures that are again, legally required and you see why the costs are what they are. Not to mention the high price of legal settlement in the society of John Edwards types who make millions bilking doctors and insurance companies off lawsuit intimidation.
By definition “insurance” is a “just in case something bad happens” hedge against the risk. It is gambling plain and simple. Requiring the house to stack the deck in your favor via mandates of coverage only increases the premium to play.
A “public” option is a joke in the sense that it would, yes as you point out be paid for by taxes, yet who is paying those taxes if those who are unemployed (paying no taxes high cost to access) or undocumented workers (no access and/or high cost to access, also no taxes) or laid off workers are the beneficiaries that the system is meant to address?
I know, I know, I am omitting the hourly employees who may not have coverage at their job offered. They are at least paying taxes yet their issue to access is merely a cost factor as you do not have to get your employer provided or in their case non provided benefit.
This is a hoodwink by the political class to have more control over people’s lives and you are falling hook line and sinker for it.
Fix the prices in the market by dropping mandates, stiffer penalties for lawsuits like “loser pays” and other tort reform measures, encourage more competition like selling policies over state lines etc. would be the better reform. Offering yet another money pit program (SSN,Medicare,Medicaid,Fannie Mae, Freddie Mac, etc…) at the cost of the taxpayers to address an issue where the issue itself has been too much government involvement in the wrong way in the first place is quite a ridiculous proposal.
Insanity is defined as doing the same thing over an over again expecting a different result. Having government stick their nose in to where they have stuck their nose in to fix a problem that they created is well… crazy.
[/political]
Great post Jeff. I think the lawyer item as others discussed is focusing purely on the economic factor of the charge vs. the soft money factor of the perception. In the end to the lawyer with their “image” the pro-bono is more cost effective than the greedy do anything for a buck image the discounted rate suggests. Provides validation to their already high rates. It in itself is a weasel marketing ploy and very rational.
Why are you only referring to the marketing weasels? There’s all sorts of weasels out there…
From the linked article…
“In contrast to the recommendations for offering something for free, be aware that users who get your product/service for “free” will place less value on it than those who’ve worked for it or bought it themselves.”
I wonder how much this contributes to the prevalence of poorly-designed software?
One may stick with a poor product because considerable effort has already been expended figuring it out, making it work, and overcoming its limitations with workarounds. It then becomes painful to embrace another product, even though it is better, because all that effort will be thrown away (and the effort of evaluating another product seems all the more unbearable when added to the effort already expended).
With badly documented freeware that will not work “out-of-the-box”, being in the exclusive club of “those who spent days or weeks figuring it out” (even if it meant reading through the source code) might contribute to a certain pride that excludes (and mocks) new users who “just want it to work”. Several corporate products that have license fees in the 10’s of K’s seem to suffer from the same problem, but they are still widely used.
It would be sad if incompetence turned out to be a deliberate strategy for success.
Recently saw a US-made documentary which claimed that the US free-market medical system costs far more per capita and provides lower-quality care for fewer people (even for those who can afford it) compared to countries where medical care is provided by the government for all.
“Don’t fall prey to the “moneymoon”; just because you paid for something doesn’t mean it’s automatically worthwhile.”
Not only is this correct, but the exact opposite is true: the moment you buy something, it is monetarily worthless until you decide to on-sell it. The only value you can place on a product you own and intend to retain is how it affects your life, comfort or living conditions. It can still have been a poor purchasing decision, but that will inevitably be in the past.
You are not using OL tags for that list. HTML failure!
@(those picking on Jeff because of the lack of coding articles): It is Jeff’s blog, he can write what he wants. I would suspect that means that he will write about what interests him at the moment. It’s obvious that his current interests involve learning more about the business aspects of software development rather than the technical aspects. While I personally am still interested in the coding/development/technical aspects I can certainly appreciate that he shares some of the interesting articles he comes across in doing his business research.
@Dana - Pepsi better than Coke? Are you trying to be a troll? Pepsi tastes flat. Coke has some zip in its taste. Although, I’ll try to be fair. I think the taste preference depends on where you grew up. Northeasterners prefer Pepsi. Southerners prefer Coke. Thus, these blind taste tests you mention depend entirely where the test takes place. As for me, when I go to a restaurant and ask for a Coke, and they say we only have Pepsi products, then I have to opt for the Root Beer. There is that big of a taste difference IMO:)
I read this book months ago at the reccomendation of Steve Yegge. He wrote a blog post about it a while back: http://steve-yegge.blogspot.com/2009/04/have-you-ever-legalized-marijuana.html
You are a bit behind on the reading there, Jeff! 
Here’s a similar experiment:
People were asked to take part in an experiment. They were given two choices.
Option number one: They get $20, right now, there’s nothing they have to do for that. If they choose this option, all the other people taking part will only get $5.
Option number two: They get $50, right now, more than twice the amount from option one! However, if they pick this option, everyone else will get $100.
If you look only at the money you (personally) will get, everyone will rather take $50 than $20, right? Why would you settle for less than half the money you could get? The outcome is surprising: The big majority took the $20. How can this be?
If you take $20, you get more than everyone else. You are the winner, you are the champ, you are the king of the hill! Everyone else is only a loser. If you take the $50, you got more than twice as much, but as everyone else got more than you, YOU are now the loser, everyone else is the winner, everyone else “scored better” than you. People always want to be the winner. They always want to get a better treatment than everyone else. And for getting such a better treatment, they are willing to accept any real loss. As giving $100 to everyone else looks like a virtual loss to them (they lost $50 compared to everyone else), but taking $20 means they made $15 more gain than anyone else. Every gain is better than the smallest virtual loss.
This is important if you work in support business. Giving people the impression they are treated in a special way makes them feel so good that even the fact that they just lost a big opportunity won’t bring them down. Just turn the experiment around: People are willing to pay twice as much as everyone else, as long as that means they get something that nobody else gets! On this simple idea bases a whole industry of luxury goods.
“WAAAH WRITE ABOUT WHAT I LIKE OR I’M TAKING MY TEARS ELSEWHERE WAAAH”
#6 is so true, especially with real estate. Anyone ever watch “Property Intervention?”
Now, to exploit these when I list my home in the future. Premium paint through-out home & exterior…upgraded crown molding…
Very interesting I enjoyed this post a lot. I don’t really think the truffle vs. kiss example is irrational though. I know I’ve done similar things myself. If I’m going to spend money anyway, I’d rather buy the high quality item. If I don’t have to spend money then I usually won’t. In some cases I’d take the pricey item over the free item if the free item was just bad, or more trouble than it’s worth.
@Mecki - I totally get that study. Why should other people get more than the person in control?! Kinda sounds like how every “modern” society ends up working.
had to share my captcha…
captcha: Harrlot bearded
Aversion to loss is what makes me suck so badly at RTS games. 
"* You will tend to overestimate the value of items you get for free. Resist this by viewing free stuff skeptically rather than welcoming it with open arms. If it was really that great, why would it be free?
- Free stuff often comes with well hidden and subtle strings attached. How will using a free service or obtaining a free item influence your future choices? What paid alternatives are you avoiding by choosing the free route, and why?
- How much effort will the free option cost you? Are there non-free options which would cost less in time or effort? How much is your time worth?
- When you use a free service or product, you are implicitly endorsing and encouraging the provider, effectively beating a path to their door. Is this something you are comfortable with?"
Someone should send this to the Mono devs…