Behaviour Change

PROPAGANDA FOR CHANGE is a project created by the students of Behaviour Change (ps359) and Professor Thomas Hills @thomhills at the Psychology Department of the University of Warwick. This work was supported by funding from Warwick's Institute for Advanced Teaching and Learning.

Sunday, November 20, 2016

Why did I nearly spend £100 on a piece of foam?

I like to think I do my research before I buy something, but I proved to myself on a rainy Sunday night when doing some online shopping that I do not. I was searching for yoga mats, and when faced with hundreds of different thicknesses, colours and materials I fell into the trap of sorting by price. Ever wondered who actually uses the ‘price high-low’ option? It was me, stupidly assuming that all of the cheap ones would be no good, so to save time I should go from the top. It was only when I was about to pay £100 for effectively a piece of pretty coloured foam that I realised I had read about this assumption. Cialdini had my back. 

It only takes a few cheap pieces of clothing to fall to pieces for us to learn the rule that expensive = good. This is ‘the common law of business balance’, that if you pay a small amount, you will not get a lot in return. Most of the time this rule is fine, it works, it saves us time, we get reinforced to use it again, and this yoga mat may well have been wonderful. The problem comes when the people selling us these items hijack this. Economics has a word for items which are in high demand simply because of the high prices asked, they are called ‘Veblen goods’ (Dolfsma, 2000). These ‘high quality items’ then become a status symbol (Leibenstein, 1950), as people know how much you have paid for that item, it is a means of displaying wealth a bit more subtly than literally throwing money around. 

Advertisers are aware of this and have had to defend the low price of their products

There’s another reason suggested for why we will willingly pay higher prices for a known brand over a identical item from an unknown one - consistency (Cialdini, 1987). We like to know what we’re getting, if we've bought something from that brand before and it was good, when buying another item we may but from there again. Another factor is commitment. If I have been walking round the gym with ‘Adidas’ written up my leggings (I have) when I go to buy a yoga mat I may look there first as I have made a visible commitment to their brand in the past. 

So I did end up saving myself money, but only because I spent my evening writing a blog post instead. Next time I'm tempted to do online shopping, I'll do my research first. 

Dolfsma, W. (2000). Life and times of the Veblen Effect. History of Economic Ideas, 61-82.

Leibenstein, H. (1950). Bandwagon, snob, and Veblen effects in the theory of consumers' demand. The quarterly journal of economics, 183-207.

Cialdini, R. B. (1987). Influence (Vol. 3). A. Michel.

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