What's your favorite logical fallacy, mental model, cognitive bias, phenomenon, etc. Wikipedia article?
What's your favorite logical fallacy, mental model, cognitive bias, phenomenon, etc. Wikipedia article?
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The decoy effect is one of my favourites. It occurs when your preference for one of two options changes dramatically when a third, similar but less attractive option is added into the mix.
For example, in Dan Ariely's book Predictably Irrational was a true case used by The Economist magazine. The subscription screen presented three options:
Web subscription - US $59.00. One-year subscription to Economist.com. Includes online access to all articles from The Economist since 1997
Print subscription - US $125.00. One-year subscription to the print edition of The Economist
Print & web subscription - US $125.00. One-year subscription to the print edition of The Economist and online access to all articles from The Economist since 1997.
Given these choices, 16% of the students in the experiment conducted by Ariely chose the first option, 0% chose the middle option, and 84% chose the third option. Even though nobody picked the second option, when he removed that option the result was the inverse: 68% of the students picked the online-only option, and 32% chose the print and web option.
The idea is that you'd spend the money on the option you think is "a steal" even though you had no previous plans of purchasing it.
Oh man "blue light specials" and the like used to drive me nuts. I never understood why people would buy things they had no plans on buying.
It was a zero percent savings to me.
JC Penney decided to show the actual price on clothing instead of what clothing retailers usually do, which is a grossly inflated price and then a slash through it and another sticker that reads like 30% off and bullshit events like "store credit" and discount sales every weekend. It was called "Fair and Square Pricing" and was quite competitive price wise with other retailers.
It nearly bankrupted them because nobody wanted to shop at a place where they weren't getting a deal.
https://www.nbcnews.com/technolog/fair-square-pricing-thatll-never-work-jc-penney-we-being-794530