How my friends and I were low-balled into a holiday way over our budget

Excited for the long summer due to follow the stressful exam season, my housemates and I decided to go on a holiday together to celebrate (hopefully) graduating University and finally entering the ‘adult world’. We decided that Dublin was our destination of choice, and the planning went ahead. As we are all on a student budget, we agreed that we would spend no more than £140 per person on accommodation. The search for a budget friendly but pleasant apartment began, as we searched through AirBnB properties that matched our criteria.

We found the perfect place in central Dublin (shown below), right next to St. Patrick’s Cathedral, advertised for £209 a night (£836 in total - exactly our budget) and decided this is the place we want to stay.

 

However, we underestimated AirBnB’s cunning. Once we got to the checkout page, the total amount of money owed was suddenly much higher than expected (see image below). A cleaning fee and a service fee had been added to the total, meaning each of us would have to pay £30 more, which would be more than 20% over budget. But once we had decided we wanted this apartment we had to have it.                                          

 

 

The advertisers have obviously read Cialdini and Schroeder (1976)’s paper on the low-balling technique. This is a persuasion method designed to get people to do things they otherwise wouldn’t do (like paying more money for a holiday than intended) by first getting them to agree a smaller amount.

Cialdini et al. (1978) demonstrated the effectiveness in a study that compared the conformity of students to committing in a psychology experiment. The control group were simply asked if they would participate in a psychology experiment that started at 7am. Only 31% of participants agreed. 

In an experimental condition, participants were first only asked if they would participate in a psychology experiment. After agreeing, they were told that it started at 7am and 56% of participants still agreed to participate (even though they probably didn’t want to). This demonstrates how powerful making low-balling can be.

The authors argue that this technique works so well because people care about keeping commitments. By getting them to agree to the first request (participating in the study or £209 a night) they will conform to the second request (getting up at 7am or paying more money).

In fact, many sales organisations, like automobile shops (and now apparently AirBnB) use this tactic to improve their sales (Carlson, 1973).  My friends and I never would have considered this apartment if it had been advertised at its actual price, but because we were low-balled by AirBnB we made a commitment that we literally ended up paying for.

Always look the gift horse in the mouth!

 References

Carlson, M. D. How to get your car repaired without getting gypped. New York: Harrow Books                (Harper& Row), 1973.

Cialdini, R.B.; Cacioppo, J.T.; Bassett, R.; Miller, J.A. (1978). "Low-ball procedure for producing                compliance: Commitment then cost". Journal of Personality and Social Psychology. 36                (5),463–476

Cialdini, R., & Schroeder, D. (1976). Increasing compliance by legitimizing paltry contributions: When    even a penny helps. Journal Of Personality And Social Psychology, 34(4), 599-604.

Yeats, E., & Yeats, E. (2018). Exquisitely restored Victorian Flat - WB Yeats - Flats for Rent in Dublin,   Dublin, Ireland. Airbnb. Retrieved 4 March 2018, from                                                                                https://www.airbnb.co.uk/rooms/1943366?location=Dublin%2C%20Ireland&s=ZKB0zEZG