Choices, Choices, Choices

I’ve been listening to the audiobook Predictably Irrational (2008) by Dan Ariely. I’m only an hour into it, but it’s already one of the more interesting books I’ve read…or listened to.

Through experiments and real-world examples Ariely breaks down the human decision process, from deciding which size coffee to purchase at Starbucks, the type of car we buy at the local dealer, to choosing a date for Friday night.

The first study involved something we encounter every day: pricing strategies. The case was newspaper subscriptions, with three tiers of pricing: 1) online-only subscription for $60; 2) print-only subscription for $120; 3) print and online subscription for $120.

Which to buy? In his study, Ariely found a majority chose the print and online subscription for $120. The rest chose the online-only option. I thought this was pretty obvious, as did Ariely, since the print-only was priced the same as the print and online subscription.

But Ariely took it a step further. If no one chose the print-only subscription, then removing it and conducting the same survey shouldn’t change the results, right?

When the print-only option was removed, the results flipped. Without the print-only subscription — the “decoy” —  a majority chose the online-only subscription.

Another example was the first home-bread maker. When it was first introduced to the market, Ariely says, the price point was set at $250. But few bought it. The problem, says Ariely, is that there was no point of comparison. The solution: the company hired a marketing firm, which suggested they build a higher priced model. The new bread maker was larger and 50 percent more expensive.

The result: sales of the lower-priced model skyrocketed. Why? Because consumers had a point of reference. The higher-priced model was a decoy.

The next study concerned physical attractiveness, still using a point-of-comparison.

Ariely captured photographs of students at a university, with their cooperation of course. He then asked a team to rate them on physical attractiveness.

He gathered the top 10 photographs of men and the top 10 of women based on the rankings. Next, he altered some of the photos, using photoshop, increasing the size of a nose, or making a person’s face asymmetrical.

He kept the real photo, and the altered photo. The original he called A, the altered minus A (-A). Ariely took A and -A and another photo from the top 10, which he called B. He did this for both the male and female top 10.

Ariely took the three photos (A, -A and B) and conducted a study. He asked students of the same university, which person of the three he/she found most attractive.

A majority, 75%, chose A, the unaltered photo. The reason, Ariely says, is -A offered a point of comparison. The same results were found in both male and female studies.

My prediction, before hearing the results, was that the students would choose B. But I was wrong.

Ariely is really bringing some interesting stuff to the table here. I find myself thinking back to the purchases I’ve made in the past week, month or year and trying to recall if price-point had a factor in my decision, and whether it was priced that way to deceive me.

Have I made my decisions based on the presence of a decoy?

Again, I’m only an hour into the book, Predictably Irrational, on my first read-through (or listen-through). But from what I’ve taken so far, this book is well worth the time. Not only for professional reasons, concerning advertising and consumer behavior, but for personal as well.

Ariely is revealing how comparisons, emotions and otherwise invisible bodies influence our everyday lives and the decisions we make.

One hour in, seven more to go.

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