Economic Wisdom to Apply in Your Twenties

Chapter 22

Chapter 3 Section 3 What we bought in the end was exactly what the merchant wanted to sell the most

Renowned behavioral economist Dan Ariely, in his book "Weird Behavior," mentions a subscription ad for The Economist:

Electronic version: $59 per year
Includes access to all online content on The Economist's website for the year and all online content of The Economist since 1997.

Print: $125 per year
Print editions of The Economist throughout the year.

Digital plus print package: $125 per year
A full year of print issues of The Economist plus access to all online content on the Economist website for a full year and all online content of all issues of The Economist since 1997.

You must be as curious as Dan Ariely when you see this subscription advertisement. Why is the print version and the electronic version plus print version package the same $125?Is it a typo?
In fact, this is precisely the brilliance of businessmen. Subscribers to The Economist must have known that after reading this ad, most people would skip the digital-only option and jump straight to the more expensive option: digital plus print.

In The Economist's subscription plan, you may not be sure that the $59 digital subscription is better than the $125 print subscription, but you must know that the $125 print plus digital subscription is better than the $125 subscription. US dollar print order.In fact, you can unmistakably infer from the bundled package: the digital version is free!
Our consumer psychology is so strange.If we want to buy a sports bike, but don't know which one to buy until we see a Tour de France winner change gears on a certain model; we want to change a stereo, but don't know what kind Yes, until we hear a set that works better than the original one; we don’t even know how to live until our relatives and friends let us suddenly realize that their life is exactly what we longed for...

In the process of subscribing to The Economist magazine, whether to order the electronic version or the print version is indeed a difficult choice.But the magazine's marketers gave us a no-brainer: a print-plus-digital package.

In the eyes of economists, such a marketing tactic is not surprising, but the effect of "bait" is at work. The "decoy effect" means that when people choose between two comparable options, the addition of a new option (bait) will make an old option more attractive.The option that is helped by the "bait" is usually called a "target", while the other option is called a "competitor".Obviously, the $125 annual print edition of The Economist is just "bait" and the "target" should be the $125 print plus digital package.

The "decoy effect" was first discovered in the selection of consumer products and has now proven to be a fairly common phenomenon.Economics believes that when people make choices, they seldom make uncontrasted choices.Then, in order to allow consumers to make choices that are beneficial to the interests of the merchants, marketers will arrange some attractive "bait" to guide consumers to make decisions that are "in the hands of the merchants".

It is not only the marketing geniuses of "The Economist" magazine who have mastered the "bait" technique. The same "trap" exists in the sales of home appliances.

For example, in TV sales, when merchants group TVs for display, they deliberately design the following options for comparison:

19 inches Xiwannian brand 2000 yuan

26 inches Sony brand 3000 yuan

32 inches Samsung brand 5000 yuan

Which one would you choose?You must think the same as the merchant. Although you are not sure that Xivannian is more cost-effective than Samsung, in the end you will be more inclined to choose the Sony in the middle after careful consideration.Yes, Sony TV must be the product that merchants most want to sell this season.

This technique also exists in merchandising of all kinds, and there will always be at least one ridiculously expensive item on the restaurant menu—even if no one ever orders it, or if you order it, the store will say it happens to be sold out.The existence of this expensive dish may not be to attract customers to choose it, but to induce you to order the second most expensive dish.Because when you see such ridiculously expensive dishes, you must feel that the second or cheaper other dishes are so "good and cheap".

This is the trick of the merchant.Every consumer seems to be a chess piece designed by the merchant. Our thoughts and motives have been thoroughly understood, and we will never accidentally send them profits according to the chess game set by the merchant.

You must ask, can we not "take the bait"?Of course, borrow a little more rationality from economists, and rationally grasp your original purchase motivation and initial budget before and during the consumption process. Maybe the merchants will do their best to you—if you just decide to buy one If you have a 19-inch TV, and you prefer the brand "Xiwannian", don't think about it for a minute, just buy the one you want!

Wisdom Pieces: Trust your first instincts and eliminate the "bait effect".

Generally speaking, making choices as soon as you get up in the morning can best reflect your deepest thoughts, because at this time people receive the least information interference, that is, when the "bait effect" is the weakest.

(End of this chapter)