The Irrational Bundle. Dan Ariely

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СКАЧАТЬ WHERE DOES this leave us? If we can’t rely on the market forces of supply and demand to set optimal market prices, and we can’t count on free-market mechanisms to help us maximize our utility, then we may need to look elsewhere. This is especially the case with society’s essentials, such as health care, medicine, water, electricity, education, and other critical resources. If you accept the premise that market forces and free markets will not always regulate the market for the best, then you may find yourself among those who believe that the government (we hope a reasonable and thoughtful government) must play a larger role in regulating some market activities, even if this limits free enterprise. Yes, a free market based on supply, demand, and no friction would be the ideal if we were truly rational. Yet when we are not rational but irrational, policies should take this important factor into account.

      Reflections on the Existence of Well-Defined Preferences

      One of the lessons from Chapter 2 was that we generally believe we have precise and well-articulated preferences, but in reality, we only think that we know what we want. Here’s an example of an experience where I went into a situation with one set of ideas about what I wanted and emerged with a very different understanding.

      When I turned 30, I decided it was time to trade in my motorcycle for a car, but I could not decide which car was right for me. The Web was just taking off, and to my delight, I found a site that provided advice on purchasing cars. The Web site, which is now defunct, asked a series of questions ranging from my preferred safety rating to my desired braking distance, my ideal turning radius, the number of passengers I’d like to be able to bring along, and, of course, my price range.

      I spent fifteen minutes answering these questions. At the top of each page, I watched the progress bar inch closer to my result. It was exciting—I was really interested in seeing what kind of recommendation the site would come up with. The final screen displayed all the answers I had provided in the last fifteen minutes; all I had to do was click on “Submit” to receive my tailored recommendation. The second I did, I learned that my perfect car was (drum roll, please) a Ford Taurus.

      What?

      Now, I might not know much about cars (in truth, I know very little about them), but I knew that I did not want a Ford Taurus (and I don’t mean any disrespect to what I am sure is generally a fine automobile). The problem was that, having just surrendered my motorcycle, I couldn’t see myself driving such a sedate sedan. I was now facing a dilemma: I had tried a deliberative and thoughtful process for my car selection, and I didn’t like the answer I got. So, I did what I think anyone in my position would do. I hit the back button a few times, backtracked to earlier stages of the interview process, and changed many of my original answers to what I convinced myself were more accurate and appropriate responses. I lowered my interest in safety and the number of passengers I wanted to take with me, and changed many of my answers to fit what I deemed a more appropriate motorcycle replacement. From time to time, I checked to see how the different responses translated into different recommendations.

      I kept this up until the car-advising Web site suggested a Mazda Miata. The moment the program was kind enough to recommend a small convertible, I felt grateful for the fantastic software and decided to follow its advice. A few weeks later, I became the proud owner of a Miata, which served me loyally for many years.

      WHAT HAPPENED HERE? On one hand, I knew that buying a car was no trivial matter, and I wanted to approach such a large decision by carefully weighing the cost and benefits in a cold, calculated, and sensible way. At the same time, I knew I was making an important and symbolic move into adulthood, and I understood that kids and the inevitable minivan (which I drive these days) were awaiting me. Nevertheless, my brain and my heart were engaged in a practical tug-of-war. Deep down, what I really wanted was a car that felt closer to a motorcycle—something that was fun to drive.

      Taking the systematic and calculated approach to solving this problem did not yield the “correct” answer, so I went back and fudged around with my responses, letting the computerized method rationalize my choice for me. This way, I ended up with a decision that made me happy, and at the same time, it was a decision that I could easily explain to myself. With a neat and programmed computerized process, it was now obvious why the small convertible was, in fact, the right choice for me.

      This elaborate computerized justification process might seem artificial and extreme, but I suspect that the same basic elements end up playing out in many of our important decisions. This experience taught me that sometimes we want our decisions to have a rational veneer when, in fact, they stem from a gut feeling—what we crave deep down. I suspect that in our attempts to make sure that we end up with decisions that seem well-reasoned and thoughtful, we commonly undergo a lot of unnecessary mental gymnastics and justifications, particularly when the choices are large and significant. Sometimes these rationalizations are complex and time-consuming, and sometimes we have the benefit of a software program to help us with more efficient rationalization. Perhaps this was the real function of the Web site I used—it was not necessarily designed to help me make a better decision, but to help me justify my choice and feel confident about it.

      In the end, following our gut feelings and rationalizing them after the fact is not always bad. It can sometimes lead us to pick a satisfactory outcome or, at the very least, prevent us from ending up with a car we really don’t want.

      CHAPTER 3

       The Cost of Zero Cost

      Why We Often Pay Too Much When

      We Pay Nothing

      Have you ever grabbed for a coupon offering a FREE! package of coffee beans—even though you don’t drink coffee and don’t even have a machine with which to brew it? What about all those FREE! extra helpings you piled on your plate at a buffet, even though your stomach had already started to ache from all the food you had consumed? And what about the worthless FREE! stuff you’ve accumulated—the promotional T-shirt from the radio station, the teddy bear that came with the box of Valentine chocolates, the magnetic calendar your insurance agent sends you each year?

      It’s no secret that getting something free feels very good. Zero is not just another price, it turns out. Zero is an emotional hot button—a source of irrational excitement. Would you buy something if it were discounted from 50 cents to 20 cents? Maybe. Would you buy it if it were discounted from 50 cents to two cents? Maybe. Would you grab it if it were discounted from 50 cents to zero? You bet!

      What is it about zero cost that we find so irresistible? Why does FREE! make us so happy? After all, FREE! can lead us into trouble: things that we would never consider purchasing become incredibly appealing as soon as they are FREE! For instance, have you ever gathered up free pencils, key chains, and notepads at a conference, even though you’d have to carry them home and would only throw most of them away? Have you ever stood in line for a very long time (too long), just to get a free cone of Ben and Jerry’s ice cream? Or have you bought two of a product that you wouldn’t have chosen in the first place, just to get the third one for free?

      ZERO HAS HAD a long history. The Babylonians invented the concept of zero; the ancient Greeks debated it in lofty terms (how could something be nothing?); the ancient Indian scholar Pingala paired zero with the numeral 1 to get double digits; and both the Mayans and the Romans made zero part of their numeral systems. But zero really found its place about AD 498, when the Indian astronomer Aryabhata sat up in bed one morning and exclaimed, “Sthanam sthanam dasa gunam”—which translates, roughly, as “Place to place in 10 times in value.” With that, the idea of decimal-based place-value notation was born. Now zero was on a roll: It spread to the Arab world, where it flourished; crossed the Iberian Peninsula to Europe (thanks to the Spanish Moors); got some tweaking from the Italians; and eventually sailed the Atlantic to the New World, where zero ultimately found plenty of employment (together with the digit 1) in a place called Silicon Valley.

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