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BEWARE THE PSYCHOLOGY OF HOLIDAY SHOPPING!
[Online -OR- Onground]
By Staff Reporters
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Power of Free
Who doesn’t love free stuff? The word “free” is like a magic spell that makes our rational minds go on vacation.
According to colleague Dan Ariely PhD, the power of free compels us to grab things we don’t need and make questionable choices. Why buy one and get one free when you can get two for the price of one? It’s the same deal, but free feels better.
IOW: Like other heuristics, the Power of Free is a mental shortcut that allows us to bypass rational thought and save effort to make quick decisions. Studies of the Power of Free have shown it to be closely linked to the Affect Heuristic. Specifically, it is linked to emotional and social thinking rather than transactional thinking. People become influenced by emotion and obligated to socially acceptable behaviors.
CITE: https://www.r2library.com/Resource/Title/0826102549
For example, say, a yoga studio charges extra to use their mats. This leads more people to pay the fee and use their mats for convenience. Then, say, the same yoga studio removed the extra fee more people would bring their mats from home instead of feeling guilty about borrowing one for class.
Removing a dollar value increases its inherent value and makes it more desirable. The type of product matters too. People are more likely to opt for a free product that is fun rather than functional. This is because emotion is more powerful than rational thinking under the influence of the Power of Free.
In another example, people are more likely to say “yes” to a free piece of cake or sample size of perfume than furniture polish or a bag of white flour.
So, next time you find yourself going to a free financial planning or retirement seminar with free dinner, or a free medical screening test, or free stock market portfolio review, just blame it on the irresistible and irrational power of free.
SPONSOR [not free]: http://www.MarcinkoAssociates.com
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Filed under: Ethics, Experts Invited, Glossary Terms, Health Economics, iMBA, Inc., LifeStyle, Marcinko Associates | Tagged: affect heuristic, cognitive bias, Dan Ariely PhD, decision-making, free, heuristics, irrational, Marcinko, power of free, psychology | Leave a comment »
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