Comments on: The Nuances of the FREE! Experiment http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/ My Irrational Life Tue, 07 Feb 2012 23:59:05 +0000 hourly 1 http://wordpress.com/ By: App Store Price Drop: A Post-Mortem « Cantina http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-27097 Mon, 06 Feb 2012 16:20:32 +0000 http://www.predictablyirrational.com/?p=653#comment-27097 [...] — but it’s not difficult to figure out that nothing is more attractive than free.  Studies have shown that people behave irrationally when confronted with a free option, and will make choices that [...]

]]> By: Kundenverhalten in 20minuten http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-25548 Fri, 28 Oct 2011 07:53:16 +0000 http://www.predictablyirrational.com/?p=653#comment-25548 [...] ich den Preis von 0.- Franken um nur 5 Rappen erhöhe? Mit Lindor-Kugeln und Hershey’s Kiss in den USA getestet … [...]

]]> By: Royston Chen http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-25093 Fri, 26 Aug 2011 05:53:57 +0000 http://www.predictablyirrational.com/?p=653#comment-25093 Free often means a trade off for something else, such as your time, e.g. the time waiting for delivery, or the extra time spent in the queue. This happens with free GP consultations; invariably you will get large lengthy delays of 1 hour or more. But its free, so a lot of people would rather waste one hour of their time than pay some money and not have to wait.

]]> By: Tim http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-19721 Tue, 01 Feb 2011 18:28:52 +0000 http://www.predictablyirrational.com/?p=653#comment-19721 Something that I noted in that study was the usage of the word STUDENTS. In the context the word was used, it is difficult to tell if the word is used to describe the fact that the study participant was an actual student (college or high school) or if its being used to describe a study participant in general.

If the participants were actual college or high school students, of course they will all go bonkers over FREE. Free is quality to a student. The only way to have enticed a student to buy a 40 cent truffle over a free hershey kiss is to spike the truffle with alchohol.

My point is, the study really tells us nothing about FREE because of the age demographic and lifestyle. I would like to have seen this study conducted with not only an older age demographic, but also people with buying power in the bank.

Then and only then will we be able to draw conclusions about the power of FREE.

]]> By: App Store Price Drop: A Post-Mortem | Cantina Consulting http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-16645 Thu, 11 Nov 2010 22:13:03 +0000 http://www.predictablyirrational.com/?p=653#comment-16645 [...] — but it’s not difficult to figure out that nothing is more attractive than free.  Studies have shown that people behave irrationally when confronted with a free option, and will make choices that [...]

]]> By: Tobu http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-16628 Thu, 11 Nov 2010 02:14:20 +0000 http://www.predictablyirrational.com/?p=653#comment-16628 A point raised in the NYT article:
Shouldn’t the summary mention people who picked neither sweet?

It’s probably mentioned in the book, but since you mentioned the discrepancies in which experiment _Cheap_ and _Free_ picked, I figured you would set the record straight on this particular subtlety.

]]> By: How Four Seasons Hotels and Resorts Remains the Hospitality Brand to Beat http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-3926 Thu, 07 Jan 2010 16:50:44 +0000 http://www.predictablyirrational.com/?p=653#comment-3926 [...] it on other resort services, they feel great about getting something for free!  (For more on how “FREE” can could rational decision-making, see Chapter Three of Dan Ariely’s book Predicably Irrational).  In any case, two workers [...]

]]> By: Why "Free" Costs You a Lot More Than You Think - PickTheBrain | Motivation and Self Improvement http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-3925 Mon, 30 Nov 2009 17:41:09 +0000 http://www.predictablyirrational.com/?p=653#comment-3925 [...] (The Nuances of the FREE! Experiment, Predictably Irrational) [...]

]]> By: tk http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-3924 Tue, 10 Nov 2009 23:28:00 +0000 http://www.predictablyirrational.com/?p=653#comment-3924 I often wondered about the amazon gift card example you gave in the book as well. What I haven’t seen addressed is how we make judgments based on perceptions of rate of return.

The Setup:
- a FREE! $10 gift card
or
- pay $7 for a $20 gift card

The traditional argument is that paying $7 for $20 nets a higher profit ($13 as opposed to $10). BUT, the return on investment is significantly lower. For a FREE! card my investment is $0 and my net is $10 – that’s an infinite rate of return. Whereas my rate if I pay $7 for a $20 card is just under 2. So, while opting for the FREE! card may not maximize my net profits, it DOES maximize the rate of return on my investment.

Imagine if you were to approach someone and say “invest $1 and I’ll give you $100 return, OR, invest $10,000 and I’ll give you $11,000 return.” which is a better investment?

perhaps we’re wired not to maximize our net profit, but to maximize return rates on our investments. If so, is this strategy categorically irrational? What are the long term implications?

Say you knew you would be presented with a series of investment opportunities, but you didn’t know anything about them before hand and your resources were limited (the general situation we call “our life”). What is the best strategy for approaching each opportunity as it is presented?

… just some thoughts.

]]> By: Cameron Murray http://danariely.com/2009/08/10/the-nuances-of-the-free-experiment/#comment-3923 Mon, 14 Sep 2009 04:14:12 +0000 http://www.predictablyirrational.com/?p=653#comment-3923 Isn’t free much more attractive than 1c because of the budget constraint? The incremental change in price from 2c to 1c is no where near as important as the 1c to free step insofar as the amount of the good (and other goods) you could purchase with a given budget.

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