Bloomberg’s proposal makes clever use of what economists call “default bias.” If you offer a choice in which one option is seen as a default, most people go for that default option. People who are automatically enrolled in a retirement plan, for instance, are more likely to stay with their original plan than those who choose plans for themselves. In countries where people have to choose to be an organ donor, most people aren’t donors; in countries where people have to actively say they don’t want to be an organ donor, most are donors. The soda ban makes sixteen ounces or less the default option for soda drinkers; if they want more, they’ll have to make an extra effort.
(via The Economics of Michael Bloomberg’s Large-Soda Ban : The New Yorker)
"a surprising amount of everyday life can be explained by signaling. For example, why did about 50% of readers get a mental flinch and an overpowering urge to correct me when I used “less” instead of “fewer” in the sentence above? According to Paul Fussell’s “Guide Through The American Class System” (ht SIAI mailing list), nitpicky attention to good grammar, even when a sentence is perfectly clear without it, can be a way to signal education, and hence intelligence and probably social class. I would not dare to summarize Fussell’s guide here, but it shattered my illusion that I mostly avoid thinking about class signals, and instead convinced me that pretty much everything I do from waking up in the morning to going to bed at night is a class signal."
#economics
#society
#behavioural economics
#behavioral economics
#class
#signalling
"Shoppers, they found, much prefer getting something extra free to getting something cheaper. The main reason is that most people are useless at fractions…Studies have shown other ways in which retailers can exploit consumers’ innumeracy. One is to befuddle them with double discounting. People are more likely to see a bargain in a product that has been reduced by 20%, and then by an additional 25%, than one which has been subject to an equivalent, one-off, 40% reduction."
#economics
#shopping
#commerce
#retail
#Psychology
#The Economist
#behavioural economics
#behavioral economics
#consumption
"Good rule of thumb: If you see a course on the menu that’s highlighted, boxed, illustrated, or paired with a really expensive item, it’s probably a high-margin product that the restaurant hopes you’ll see and consider."
#economics
#The Atlantic
#pricing
#behavioural economics
#behavioral economics
