Why free stuff makes us irrational
5 days ago
- #behavioral economics
- #consumer psychology
- #free samples
- In 2015, a 78-year-old was punched at a Costco over Nutella waffle samples; in 2018, two septuagenarians fought over cheeseburger samples.
- Behavioral psychology explains that free items can lead to irrational actions, driven by a 'positive glow' from not paying.
- A study by Dan Ariely found people often choose free Hershey's Kisses over slightly priced superior Lindt truffles, demonstrating the 'zero price effect'.
- Free shipping heavily influences online purchases, with 77% of respondents citing it as a key motivator, even if it leads to worse financial decisions.
- Free samples in stores cost companies billions annually but yield high returns, with significant sales increases for sampled products and related categories.
- Free content online, like news articles, faces challenges in converting readers to paid subscriptions due to perceptions of content as inherently free.