When contemplating the purchase of a $25 pen, the majority of subjects would drive to another store 15 minutes away to save $7.Tversky and Kahneman conducted the following experiment When they added a “deluxe” version that was 50% more expensive, they started flying off the shelves the first bread machine now appeared to be a bargain When Williams-Sonoma introduced bread machines, sales were slow.Ariely did an experiment where he used photos of undergrads to test this 75% of research subjects chose choice A over choice B.This is irrational behavior because in the presence of two equal options, we couldn’t decide between the two, and the presence of a third, inferior option, shouldn’t cause us to suddenly prefer one of the two. Similarly, had the third option added been “B minus” – “Rome without a free breakfast”, we would have selected that “B” option – “Rome with a free breakfast”. Thus, the simple addition of a third “A-” option, “Paris without a free breakfast”, will cause us to choose “Paris with a free breakfast”, the “A” option, over “Rome with a free breakfast”, the equally attractive “B” option.
Simply adding a third option – an “A minus” version of one of the options, will cause us to pick the A version, over the equally attractive B version.We cannot decide between the two because we love Paris and Rome equally. Say we are trying to decide on a vacation between two choices: a Paris trip with free breakfast and a Rome trip with free breakfast.Thus, given three choices, A, B (very distinct, but equally as attractive as A), and A- (similar to A, but inferior), we will almost always choose A, because it is clearly superior to A. We always seek to draw comparisons, and we are often unaware as to how seemingly irrelevant factors such as the simple presentation of options, actually influence what we select. Predictably Irrational Author: Dan ArielyĬlick Here to Get the PDF Summary of This Book & Many More
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