#113 - The funny ways we think about money
We forget that everything is relative When we see a sale, we shouldn’t consider what the price used to be or how much we’re saving. Rather, we should consider what we’re actually going to spend. Buying a $60 shirt marked down from $100 isn’t “saving $40”; it is “spending $60.” Aunt Susan never actually got $40 in her pocket, but she did get an ugly
... See moreDan Ariely • Dollars and Sense
Yes, it is very frustrating to pay more than you should have. But the anger over this form of “rip-off” fades if the product still gets the job done. Worse is the situation when the product is flawed. The frustration stays with you until you finally use up the product or get rid of it. The moral here is that one should not lose sight of quality in
... See moreHermann Simon • Confessions of the Pricing Man: How Price Affects Everything
What should not matter in a perfectly rational world? Sale prices or “savings,” or how much we’re spending at the same time on something else (relativity) The classification of our money, where it came from, and how we feel about it (mental accounting) The ease of payment (pain of paying) The first price we see or previous prices we’ve paid for a p
... See moreDan Ariely • Dollars and Sense
We forget that everything is relative When we see a sale, we shouldn’t consider what the price used to be or how much we’re saving. Rather, we should consider what we’re actually going to spend. Buying a $60 shirt marked down from $100 isn’t “saving $40”; it is “spending $60.” Aunt Susan never actually got $40 in her pocket, but she did get an ugly
... See more