by Dan Ariely
Relativity can be complex and seemingly
contradictory when it comes to our decision making. As Dan Ariely
explains in his book, Predictably Irrational, the human mind has all
types of tricks and processes that allow us to make choices. He gives
a great example of relativity in the following passage:
Let me explain with an example from
a study conducted by two brilliant researchers, Amos Tversky and
Daniel Kahneman. Suppose you have two errands to run today. The first
is to buy a new pen, and the second is to buy a suit for work. At an
office supply store, you find a nice pen for $25. You are set to buy
it, when you remember that the same pen is on sale for $18 at another
store 15 minutes away. What would you do? Do you decide to take the
15-minute trip to save the $7? Most people faced with this dilemma
say that they would take the trip to save the $7. Now you are on your
second task: you’re shopping for your suit. You find a luxurious
gray pinstripe suit for $455 and decide to buy it, but then another
customer whispers in your ear that the exact same suit is on sale for
only $448 at another store, just 15 minutes away.
He later explains that the way to
combat this type of perception is to broaden our focus by asking
ourself the question “Where can that $7 go that is more useful?”
and this allows us to see the value of $7 matched up against itself,
not relative to a huge sum of money like hundreds of dollars.
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