Free!

Tyler Cowen posted a blog today discussing one of the chapters in Predictably Irrational– the chapter on Free!

A lively discussion emerged from his posting, with people proposing many alternative accounts for the findings. Most of these alternative accounts are interesting (transaction costs, gifts, social norms) and they are ones that we have tested and have found that they cannot account for the phenomenon of Free!

For the complete paper describing many of the experiments see this link, or see Chapter 3 “The Cost of Zero Cost Why We Often Pay Too Much When We Pay Nothing”