Predictably Irrational in the electronics store

Two things happened that led me to write this blog post.
One, I've just read (heard actually, through an Audible Audiobook) Dan Ariely's excellent book - Predictably Irrational http://www.predictablyirrational.com/.

Two, newly sensitized by that book, particularly about Relativity (not the Einstein variety, the common variety), my recent visit to an electronics store (Reliance Digital) was a nice eye opener on what retailers do to convince, confuse & corrupt us into buying what they want us to buy, rather than what we want to buy.

As I walked to the DVD player section of Reliance Digital, I was greeted by shelves full of DVD players from every manufacturer imaginable. The Sony's & Samsung's rubbed shoulders with the Onida's & Mitashi's. I was looking for a particular combination of features and specifically a Phillips DVD player (probably because I have one myself. NOTE: That would be Anchoring in Ariely's book).

The sales person came forward, heard my desired features list - DivX compatible, USB reader capability & HDMI output - and took me to the shelve that had two DVD players.

"This is the Philips DVD ", he said. "DivX compatible, reads USB & has HDMI out." I asked him the price and he mentioned what was well within the budget I had in mind.

"But this", he said, pointing at the DVD player next to the one he was showing me all this while, "is the Phillips DVD . All the features of the other model PLUS the glossy exterior finish, a FREE HDMI cable and picture Upscaling".

At this point, he was joined by another sales person. He repeated the glorious features of the second model and I found upon asking, that this 'advanced' model was pricier by a whole 67% when compared to the first model.

Then came the killer blow, the one Dan Ariely warns us against in the book.

The first sales person said - "It's only XXX.XX more than the less advanced model. Go for it. It's the best!"

What is happening here?

According to the book, the cheaper, less functional DVD player is a decoy. It's there to make the feature rich & more expensive DVD player look better as well as create a price point in your mind, what Ariely calls Arbitrary Coherance.
If the less functional DVD player is 5000 rupees for e.g. you would expect naturally that with the 'advanced glossy finish & the FREE HDMI cable' the more functional DVD player would be some what pricier.

The other thing that happens is that you compare the prices with each other, not individually. So, rather than think that you are about to spend 7000 rupees on a DVD player, you think you are going to spend "just 2000 rupees more than the less attractive mode". This allows you to rationalize the decision to pick the more expensive item.

So next time you are out shopping, consider how the items have been laid out before you. Try & pick the decoys and avoid buying something just because it has been placed next to a somewhat inferior version of itself and has smooth talking salesmen/saleswomen showing you just how little more you'd end up spending to get a 'superior' version!

Happy Shopping! :-)

Outliers by Malcolm Gladwell

I’ve just finished hearing this book by Malcolm Gladwell. I say ‘hearing’ because I managed to get hold of the audio book. After sitting through seven hours (1 hour per chapter) of Malcolm Gladwell’s narration, here are the things that I found interesting and useful.



- 10,000 Hours. That’s the minimum time required to achieve mastery of pretty much anything.
- Talent will not get you to the top. It will get you in through the door. You still have to work insanely hard to make something useful out of your talent.
- Outliers, or those that achieve far more success than normal, work much much harder than normal people. They are driven. They are able to work that hard because they are driven.
- Just working hard however is not enough. To be wildly successful, you must be in the right place, at the right time. You must get good opportunities.
- Where you come from makes affects chances of your success. Your culture, your family, the work that your parents do, all of this is directly correlated to your success.
- Hoffstede’s Cultural Dimensions: The result of a 20 year long study by a Dutch researcher. Classifies people of different countries based on 4 dimensions, thereby describing their behavior.

Refactor Your Wetware

New book from the Author's of Pragmatic Programmer.

Thanks to Mani for mentioning this in a recent chat I had with him.
You can read the first two chapters for free.

http://www.pragprog.com/titles/ahptl/pragmatic-thinking-and-learning