Sunday, June 13, 2010

Truffles or Kisses by guest blogger Steven Head

(Sorry about the formatting. Blogger has a mind of its own today, and I am not interested in fighting with it!)
At the end of April I traveled to Nevada to visit family and attend a high school production of 'The Wedding Singer'. Upon my return the guy I work with, who had just been in Florida at a conference, was talking about Daniel Ariely, a behavioral economist. Ariely sounded like the type of social scientist Malcolm Gladwell references via experiments in books like Tipping Point and Outliers. So I picked up Ariely's 2008 book, Predictably Irrational: The Hidden Forces That Shape Our Decisions.

Ariely takes a dozen chapters to identify the forces from the title he and colleagues have observed. One is the power of free. The experiment involves offering people passing by the chance to purchase a Lindt truffle for 15 cents or a Hershey's Kiss for 1 cent with a sign announcing, One Chocolate per Customer. Of the two, the price on the truffle is an incredible bargain and was the choice 70% of the time. By dropping the price by 1 cent each, making the Kiss free, everything changed. It seems free was too much to resist and the preferred choice switched, 70% wanted Kisses.

On a rational basis, the truffle at 14 cents was still the great bargain it was at 15 cents, and the selection should have remained the same. But the free mass produced Kiss short circuited the rational choice.

Another experiment involved groups of people at a bar where they were offered a free sample from a menu of four micro-brew beers. The first group made their selections verbally and the common pattern was not to choose the same beer as another in their group, although many said they would not order it again. The second group made their selections by privately marking the menu. The likelihood of selecting the same beer was much higher in the second group and so was the inclination to order it in the future. Practical lesson, know what you want before the server appears and stick to it.

There are also experiments concerning honesty which I leave to your curiosity. The book is filled with revelation about how you, and those around you, make decisions. Which gets back to the point of behavioral economics. We love to think of ourselves as logical people. But when our decisions are studied, things like emotion, price, shortsightedness, the urge to be unique, and other irrelevant factors guide our choices.

If the Gladwell books interest you then you might enjoy this book. Next time I'll be reviewing Craig Johnson's 6th installment in the Walt Longmire mystery series, Junkyard Dogs. This clearly violates all of Bev's reading standards, dog in the title, series book, and detailed description of frigid weather in northern Wyoming in the opening chapter. But if you do not laugh out loud by page 5 you might want to see a doctor, your sense of humor may need some rehab.

*********Thanks Steve!

Frankie, the "Walk 'N" Roll Dog" made an impromptu stop here last week, and, she made some new friends in the process. Cute, huh?
Frankie has had some troubles, but thanks to a big-hearted owner, she has been outfitted with a neat little, wheelchair devise that attaches to her butt, making her totally mobile...and so adorable. Frankie will be back for a formal meet and greet (while her owner signs books!) in September or October.
Any Adam Sandler fans? I saw "Bedtime Stories" this weekend. Fun, funny, charming...a fairy tale for all ages. And, what can be said about the final guinea pig scene? Watch it and see!
I hope to see you soon.

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