Comments on: SHHH . . . DON’T SAY ‘RECESSION.’

By: jbuford39

jbuford39 — Fri, 26 Dec 2008 00:10:24 +0000

But isn’t that precisely the reason that the government NOW admits/says that one year ago we entered a recession? That is why no one should believe any positive economic statement from the government or Wall Street. One should always ask:”Does the speaker benefit if I believe that what he says is true?”.

By: Mark

Mark — Tue, 16 Dec 2008 14:22:38 +0000

Yes. It is called “Investor sentiment” or Consumer confidence. Even those who were smart during the times of plenty by saving money, reducing extraneous expenses and preparing for any market downfalls now believe they are being hurt by a “recession”. All of the talking heads on TV continually scare the consumer into believing they are being hurt by this imprecise term. They are being hurt by the decisions they made during times of plenty and allowing those decisions to affect them today. Remember the story of the Grasshopper and the Ant? Aesop’s fable I believe. Most consumers did not use the “good times” to prepare for the bad. Now, instead of focusing on correcting those bad behaviors/decisions they can say their bad fortune came from the “recession”.

By: Asit

Asit — Thu, 11 Dec 2008 03:57:44 +0000

A few days back, I did something on similar lines.
In my team, each associate completed 15 units of work every day. After some improvements to the tools used, I figured out that the team could easily deliver 25 units per associate everyday. But from a previous experience with the same team, I was aware that convincing the team for the increase in count would be difficult as they had been used to deliver 15 for the past several months. And I was not willing to go the hard way immediately.
I started thinking about better approach to convince. In India, people bargain a lot. Starting from cab services to purchase of products, there is always a scope to bargain. I had noticed that on many occasions, the final price tend to be an average of the price that was initially quoted by the seller and the one initially suggested by the buyer.
I decided to experiment this in my team. Citing improvements in tool, I asked for a delivery of 32+. As expected, the team resisted the move. Firmly pressing on the need to increase the count, I suggested them to come up with a figure they were comfortable in. Surprisingly, my team came up with a count of 24 on its own.
Now if this incident is correlated with the experiment in your marketing class, I see a strong pattern. Somehow people, when unaware of the true quantity of an item – money in your example and work share in mine – look for a benchmark and tend to pick up the first figure they are given or suggested as the baseline.
May be, I should think about joining research in behavioral economics.

Regards

By: eddie

eddie — Sat, 06 Dec 2008 20:31:54 +0000

Thoughts are Things, someone said….

By: Bob Kosovsky

Bob Kosovsky — Wed, 03 Dec 2008 23:11:43 +0000

This jives with the idea of Appreciative Inquiry, which seeks positive change by focusing on that which is positive. They posit that if you focus on what’s broken or not working, you’re going to be mired in difficulty, whereas if you focus on what is working and try to enhance it, you’ll have better luck moving toward a more positive outcome.

But perhaps it’s irrationality that makes us temporarily abandon common sense in order to focus on what’s broken. Maybe there’s something “comforting” in knowing that something is broken? Maybe because it’s familiar, we would rather focus on the broken thing than the unknown positive outcome?

By: Paul

Paul — Wed, 03 Dec 2008 13:45:32 +0000

But isn’t that true of many things. Our values are learnt. Our tastes are learnt. At least the latter is irrational.

Isn’t that how auctions that deal with celebrity undies and other such vital goods work?

Premier brands and labels thrive on our ignorance of true value/true price.

The interesting perspective that emerges from the study is the iffiness of the straws we clutch at in our desperation.

By: carlos

carlos — Tue, 02 Dec 2008 13:28:44 +0000

In Spain, President Zapatero has been over half and year denying any kind of finnacial problems in our economy, despite the fact that all the macro economy figures pointed to a crisis. During all this time, Zapatero’s reasonig was a very psychological one, if you don´t say crisis people will not behave in that way. But since there is no credit, and a great part of the activity was leveraged, no matter what you think, the crisis is there. Of course, if he could accepted the situation one year ago, it could be possible to make better decissions to cope with the prolem.
I think that despite the fact that sometimes we asume arbitrary prices as reference points, the more usual influence in our bids for a product is our budget limit. I can bid for some gift on ebay and paying an inflated price based on this anchoring effects.
However, no matter what´s the initial price for a Piccaso that I can´t no bid any amount for it. Simply is out of my budget. The real problem is that an important percentaje of people can´t bid because they don´t have money to do it, and of course they dont have credit as in the last years. Even if you suggest to the congress to aprove a recession ban act, to eliminate the concept from the news and conversations, the economy will not improve for sure.

However i guess that instead of this “don´t talk about..effect” a more serious problem is the resistance of people to accept losses and adpat prices to demand offers. In my country, people resist very seriously to accept taht the real price of their products or possesions is not what the owner decides, is what people want or are able to pay for it.

However, sex is always a more interesting issue even if you practice it

best,
Carlos

By: zach

zach — Mon, 01 Dec 2008 06:31:03 +0000

Just finished the book and thought I would check out the web site – three quick comments: First, your book is a fun read and has potential for goodness. I’d like to think people will use its insights for good vs. evil, but just money and the internet can be used for good or evil, so can behavioral economic findings. Second, your use of “free lunches” will require a pretty significant culture change… it’s hard to change a “culture” – specially America’s culture. I do sincerely hope we all try harder to do so (for the better) though. Third, the book has helped reinforce what I already believe (not nec. practice all the time) – make decisions based with clear and logical thought. e.g. if I had to bid on the bottle of wine I would either ask for a taste and bid on the value of that enjoyment of it over what other enjoyment the funds may be able to provide. If no taste is available, I may have to fall victim to past “wine anchor” prices, or maybe for fun turn the tables and ask you to pay me to take it off your hands. Thanks again for a good read and thought provoking book.

By: Bernadette Keenan

Bernadette Keenan — Mon, 01 Dec 2008 00:40:01 +0000

I thought this was going to be about sex and didn’t really get the point you were making because I kept thinking about sex after you introduced the topic in the first paragraph. OK just kidding, this is interesting. I am curious that no one seemed to wonder how much the items were really worth.

By: Pete W

Pete W — Sun, 30 Nov 2008 21:19:31 +0000

The recession has been in the making for at least a year now. In my opinion, the economic stimulus checks were an attempt to defer the recession until Bush was out of office.

Prudence in our purchasing decision might be the difference between a Recession and a Depression.

It’s good that we’re talking about it.