The Power of "Free"

[Totenkindly]

From the Predictably Irrational site blog:

In one of our projects, Kristina Shampanier, Nina Mazar, and I examined whether our reaction to Free! is just a rational reaction to a low price (a very low price) or if it is an irrational overreaction to Free! ... For now let's skip the experiments and consider the following thought experiment:

Consider how long you would be willing to stand in line for a free Ben & Jerry's ice cream cone. Let's assume that your answer is 20 minutes and that the cost of a Ben & Jerry's ice cream cone is $1.45. Now answer this: would you be willing to stand in line for 20 minutes for $1.45 in cash? No way.

I thought it a nice way of skipping over all the rigorous crafting of psychological experiment... This just cuts to the chase.

Thoughts? Other examples?

The first thing that comes to mind is when we buy two or three of something we're somewhat indifferent to at the store, just because we can get another one for free as part of the deal.

 

[miss fortune]

I suppose that principle definitley applies to things that are two get one free I have the bad habit of deciding I want one of something- then I see a buy 2 get 1 free sign and have to buy two to get the third one!

a lot of times this is apparently a good trick to convince people to buy something because you gave them something free

 

[zarc]

Hmm. I remember, when a bit younger, of being a bit fond of "Buy this and get these for free or at a lesser price!" but it was never for a common thing nor done often (very rarely). Not even with my parents would I want them doing it and would try to 'talk' them out of it as it's "A rip off! Why do you want it?!" I didn't abuse it as I knew most things were unnecessary and I'd get irked of the Company & co. trying to have me. I'd also buy expensive things with which the 'free or slightly less" item was in relation to it (ex. boxsets for anime). But even with expensive items, clothing mostly, I wait for sales (sometimes) and never buy unless in perfect condition-- that goes for anything (even people!!)

I've done away with the Gimmicks, for the most part, as I'm very conscious of my spending habits and what draws my attention (Even the bad stuff! I'll mentally nip that desire dead!!!). If one is aware enough to note that they would do well to have the other items, then I'd suppose it'd fine. But if it's just filler crap, then why bother? I'm a rat-pack (lolol edit:) or a pack-rat! enough as it is...and a very choosey one at that!

Consider how long you would be willing to stand in line for a free Ben & Jerry's ice cream cone. Let's assume that your answer is 20 minutes and that the cost of a Ben & Jerry's ice cream cone is $1.45. Now answer this: would you be willing to stand in line for 20 minutes for $1.45 in cash? No way.

Would never, for either. Not even as a kid, that I can recall, unless I was waiting for someone else. Even then, I'd sit it out or read or daydream. Also, for the 20min for a buck of junk food-- I'm fortunate in that I won't tolerate wasting such time that I'd sooner chuck it than buy it. Though, I'm excellent at spotting openings in cashiers but sometimes at that point I've already mentally rejected the piece of crap that I won't bother.

 

[cascadeco]

Well, this example isn't 'free', but it's a similar concept.

Many clothing stores I've been to will hand me a coupon after my purchase, saying that if I come back within X number of weeks and spend over Y amount, I'll get $Z off anything over that amount.

I always throw the coupon away!! I don't want to go back in 2 weeks just to buy something I wouldn't have gotten otherwise!!

There have been a few times too where I'll get a coupon for something free, without any requirements for additional purchases. Assuming it's something I actually WANT, I'll go in and get my free item (no lines), without buying anything else!! (which is so not what the companies want people to do!!) I'm who the sales people hate!!

 

[Totenkindly]

Many clothing stores I've been to will hand me a coupon after my purchase, saying that if I come back within X number of weeks and spend over Y amount, I'll get $Z off anything over that amount.

I always throw the coupon away!! I don't want to go back in 2 weeks just to buy something I wouldn't have gotten otherwise!!

Exactly, I used to be excited about those things too... then got jaded and realized I was just spending money I did not want to spend. (CVS hands them out too, and some other stores.)

Bottom line: Do I want it or not? If I didn't really want or need it, I'm spending money I do not have to.

Or going to buy things "on sale" after a holiday. Do I really need that stuff? If not, then I am still wasting money.

But my brain is trying to compare it relatively:
1. The window of opportunity is shrinking and I will lose the option if I do not act. (and what if later I decide I needed it?)
2. Compared to paying SOMETHING, paying NOTHING is much better.
Thus... the urge to buy.

Oh, I do that "free" thing too. Yes, I think it irks them... you take your free thing and just run!

 

[disregard]

I tend to buy exactly what I want at whatever price it's going for; given, I consume at a freakishly low rate compared to most. Accumulation of crap scares me. The loss of a couple dollars doesn't.

 

[EffEmDoubleyou]

I'm a cheap bastard, so I like the free things that are ACTUALLY free, like when a new restaurant sends out a flyer. I'll also use the "get $X off when you spend $Y" coupons but only if I was getting something anyway.

On the whole, I'm like Dana...I don't like having too many things. So usually if I really want something specific, I will pay what it costs.

 

[Athenian200]

I'd be willing to stand in line for 20 minutes for $1.45 in cash... it's money, isn't it? If I have time to spare, why not earn a bit of money for my patience? Not sure about the ice cream, though... it's kind of an indulgence, and it won't exactly benefit my health. That's more the sort of thing I would take if it were laying out or easily accessible, but I wouldn't be willing to put in 20 minutes for it. I guess I'm really weird.

Although I wouldn't buy something just because they were offering a free third one for buying two. The net result of that is that the price of all three is reduced by 33.33% (At least I think so... I'm not great at math). So essentially, it's a sale price.

However, I would be tempted to buy more of them and take that offer if they're something I use on a regular basis and aren't likely to perish before I get through them all (I would also check that the price hasn't been marked up from the normal price).

 

[Grayscale]

all benefit and no cost... simple enough

 

[Zergling]

I'm a cheap bastard, so I like the free things that are ACTUALLY free, like when a new restaurant sends out a flyer. I'll also use the "get $X off when you spend $Y" coupons but only if I was getting something anyway.

On the whole, I'm like Dana...I don't like having too many things. So usually if I really want something specific, I will pay what it costs.

This is probably what i would do also, though if needed I would adjust the timing of certain buying to be able to take advantage of the coupon without getting anything extra beyond what i would have gotten anyway. (With food it is easier, though, this is where most of my coupons come from, since i can just save food over a few weeks, and only buy food that I'm not likely to eat more of just because I have more of it.)

 

[Ghost of the dead horse]

Free is a power word - like love, freedom, child, country and justice.

 

[ygolo]

I tend to buy exactly what I want at whatever price it's going for; given, I consume at a freakishly low rate compared to most. Accumulation of crap scares me. The loss of a couple dollars doesn't.

I have the same sentiments. I already have too much crap.

Although, I may fall pray to book sales of this sort, since I seem to convince myself that I will read whatever piece of non-fiction I buy at some point (and I always read some parts of every book I've bought).

I think behavioral economists may benefit from doing their own "typing" at this point (degree of loss-aversion, tendency towards free stuff, responces to getting "unfair" portions of free money, etc.) A lot of what comes up seems like rehashes of old material. It also seems clear with every piece of predictable irrationallity, there are countless people who are irrational in other ways than the "norm."

 

[Nocapszy]

Free is a power word - like love, freedom, child, country and justice.

And fuck.

 

[Nocapszy]

Consider how long you would be willing to stand in line for a free Ben & Jerry's ice cream cone. Let's assume that your answer is 20 minutes and that the cost of a Ben & Jerry's ice cream cone is $1.45. Now answer this: would you be willing to stand in line for 20 minutes for $1.45 in cash? No way.

Yes way. That's why gameboy was invented anyway.

Or bring friends. Or even enemies. What we should do is have all the people who owe us money show up to the line too. Then we get 1.45 + X, and the other people get a clear conscience and an extra 1.45. It's like they owed you that much less.

 

[nightning]

"free" the keyword in advertising... the magic word that draws people's attention.

Free is better than fuck Noc... Although perhaps free fuck sounds even better. (please excuse my semi vulgar language).

A nice thing about these power words... their effects are stackable.

 

[zarc]

Free is better than fuck Noc... Although perhaps free fuck sounds even better. (please excuse my semi vulgar language).

Eh. This is why people can have such low standards. :rolli: Getting laid for free doesn't equate it being excellent and it'd probably be Quantity beating out Quality anyway.

 

[INTJMom]

From the Predictably Irrational site blog:



I thought it a nice way of skipping over all the rigorous crafting of psychological experiment... This just cuts to the chase.

Thoughts? Other examples?

The first thing that comes to mind is when we buy two or three of something we're somewhat indifferent to at the store, just because we can get another one for free as part of the deal.

I agree that we will do something to get something for free that we wouldn't do otherwise.
Marketeers know that and that's why they offer free things to increase business.

My husband and I have been to a couple of time-share presentations because of the free gifts they offered us to do so.

 

[celesul]

I'm another person who would stand in line for 20 min for $1.45, and would also stand in line for the ice cream. I love ben and jerry's ice cream ^.^

I don't get the buy two get one free stuff, although if I already am buying the two, I'll take the free one as well. I only buy something on sale if I'd buy if normally, as in, I need or want it. Ice cream always qualifies... ^.^ I'll take it if it really is completely free, as in, no hidden costs though.

 

[563 740]

To be fair though, the value of Ben & Jerry's ice cream is higher for most people than the value of $1.45. Ice cream is delicious and yummy and full of rainbow kisses whereas $1.45 is a just dollar bill and a handful of change. Who the f*ck cares about a handful of change??

But back to the thread title, free is definitely my favorite four-letter word. Hell, I almost signed up for two free packs of Natural American Spirit cigarettes despite a lifetime of being a non-smoker. The power of free!!

 

[Zergling]

To be fair though, the value of Ben & Jerry's ice cream is higher for most people than the value of $1.45. Ice cream is delicious and yummy and full of rainbow kisses whereas $1.45 is a just dollar bill and a handful of change. Who the f*ck cares about a handful of change??

To beat this example into the dirt further, there's also a time element to the free ice cream, since it's harder to find ice cream than it is to find a way to save 1.45 in general. (Though waiting 20 minutes still seems to be quite a long time for a lot of people.)