Dear Irrational (Radio Promotions and Bikes)
Dan:
I heard a portion of your interview on CBC radio (near Toronto, Canada) and was instantly inspired to buy your book, a behavior most uncommon for me. I must say I thoroughly enjoyed it and have shared stories from it with many friends and colleagues. I look forward to its sequel.
So here’s a question you may wish to explore although the irrational behavior may be harder to test since it’s not an immediate response like cheating or making a purchase. I am wondering about our irrational affinity/allegiance to things. For example, we have a certain radio station on at work and it held a “bike a day in May” promotion where one could register at the station’s website and each morning at 7:30 a lucky person’s name was read aloud on air and that person had 10 minutes to call in and receive a brand new shiny bike. I signed up (another behavior I have never done) and found it curious how enticingly exhilarated I was to anticipate my name being called. Even though I work shift work, even when I got home in the wee hours (when I worked nights) I would set my alarm, turn on the radio and listen intently, then return to bed when the contest was done for the day. (As a side note, despite NOT being named and so receiving nothing, I have had a strong urge since then to go out and purchase a new bike. It’s like, in my mind (or my heart?) I already have laid claim to a bike and it’s a part of me now.) Regardless, the contest had me faithfully tuning in day and night, which I believe was the station’s primary underlying goal.
That’s all backdrop for the most recent event of this week. This station also asks a trivia question each morning. Many coworkers ask me everyday what the question of the day is. We all have light hearted fun guessing answers. This week someone confidently announced the answer, told me to call it in, which I obediently did (never done that before!) and won. The prizes were not huge, but…here it is… I have felt an irrational affinity to that station ever since. Their music and programs are no better than all the others, but I notice an inexplicable allegiance to this station, like they are friends of mine. Please explain / test out this behavior. Any comments and insights would be appreciated.
Irrationally faithful,
Dave
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Dear Dave,
These are two wonderful observations and thanks for sharing them with me.
I think that you are exhibiting multiple irrationalities in your radio related behavior:
1) Regret: You kept on listening for your name to be called because of possible regret. You imagine how you would feel if someone would tell you “Hey Dave I heard you won that bicycle….” and the possible regret from this makes it much more important to keep on checking
2) Thinking leading to action: I suspect that thinking about the bike you might win and how you would use it made you think more of biking and increased your desire to have one
3) Reciprocity: we are largely social animals and when someone does a favor to us we want to “pay” them back — which is what you are doing by listening more to the station….
Irrationally yours
Dan
The Upside of Irrationality, explores some positive and some negative ways that irrationality plays out in our lives.
How strong is the allegiance attained from these things? If Dave hears of another radio station holding a new promotion, might he not switch to them? Places like McDonalds are constantly coming out with new promotions, to keep Burger King from snapping up their customers. In the case of ISPs, there’s a built-in disincentive to switch because most people have their email address tied to the ISP name, so promotions are usually only offered to new customers.
I have an observation and a question for Dave:
1. Dave, do you prefer to praise others -
- Verbally?
- Through acts of service?
- Through gifts?
2. This reminds me of the chapter in the book “Influence: The Art of Persuasion” by Robert Cialdini describing the essay contests that Chinese POW camp officers held for US captives to subtly, emotionally, and effectively crush their patriotism…
You might want to look that one up! It relates a lot to the chapter in “PI” on community service participation after what could essentially be called “push-polling”.
Dear Professor Ariely,
Let me preface my remarks by saying that I am an economist.
I read and enjoyed “Predictably Irrational” very much, but I have two comments:
1. I would have made the “rational” choices in the Amazon examples you relate.
2. With respect to the Hershey/Lindt choice, I see the choice of free kisses as rational. In the economic literature, I have not seen “relative price” used to denote the difference in the prices of two goods, but rather the ratio of the prices. When the price of one good is zero, the price ratio is either zero or undefined, depending on which price is in the numerator. Further, I should think that a “rational” consumer would purchase the product that yields the greatest marginal utility per dollar (cent in your example). In your example, the reduction in the price of the kisses to zero, boosts the ratio of the marginal utility to price for that good (inferior chocolate in my opinion) to infinity while that of the Lindt truffle remains finite. Hence, except for those people who dislike Hershey chocolate or have Lindt shares in their portfolios, I would expect a shift in purchases (choices) from Lindt truffles to Hershey kisses if the price of a kiss falls to zero.
Thank you again for a very informative and entertaining volume.
Sincerely,
Michael Ulan
Dear Professor Ariely,
I just started reading your interesting book, and was surprised that you wrote about Salvador Assael, the New York pearl dealer. From where did you hear about this man ? The “pearl dealers’ world” (of which I am a part of) is so very small compared to that of the immense diamond industry. Why did you not write about the diamond world, which is really the most staggering in terms of the irrational behaviour (of paying large sums of money) exhibited by consumers ?
Dear Professor Ariely,
I’ve just finished your book and been sharing its insights with the Disney Pricing Department. I simply wanted to point out (or ask if this is an accurate assessment), that the goal of studying irrational behavior would be to help make behavior more rational and if the success of studying irrational behavior would be to prove the traditional economists right. That is traditional economists think irrational behavior will correct itself over time and studying irrational behavior will correct the problem.