Saturday, August 14, 2010

The paradox of 50% off and Buy 1 : Get 1

I had been to one of the Shopping malls in Bangalore to purchase some items. And in my head was the chanting of Dan Ariely's Predictably Irrational, a book that throws open the mystic nature of human decision making. I was sure to make use of Dan's reasoning together with my instinct to do some really effective shopping.
As I browse through the store looking for a great pair of Running shoes, I was overwhelmed by choices. The choices that were slowly hampering my decision making abilities. The human mind can unconsciously decide with a vast number of choices, but when they are explicit, conscious and the sense organs too taking part in the decision, that is a recipe for disaster.
I liked some shoe pairs based on the comfort factor, looks and other related areas. But soon I find myself standing next to a great pair, which costs around 4k, but available at a discount of 50 %. I started reasoning in my head, convincing myself that this is better than the rest of them. Its like a Mind talking to other Mind. May be we should soon have a movie, the Conversations of a Shopaholic Mind. :)
But the best was yet to come. I see an even more appealing offer : Buy 1 Get 1. Wow. I buy a pair worth 2.5k and get another pair for free. My other mind found something to fight. Now it made me feel that I could really use this discount. I might pay 500 bucks extra, but to the satisfaction of getting another pair of shoes for free.
So I finally landed with buying two shoes at a price of One. My other mind was victorious. As I head to the Billing counter, I realized something. The billing guy bills the two pairs each at half of the amount I was ready to pay. That means, I pay Rs. 1250 for each pair of shoe. And I was like, damn. I came here to buy one good pair of running shoes. And here I am, buying two ordinary pair of shoes, not really matching my requirement, at a price greater than what my first mind registered, the worst : I did not want to pay 1.25k for that 'free' pair of shoes.
Purchase was done. I shelled out the amount. Dan's talk in my head about how the human mind gets fooled by clever antics of the marketers. If the billing guy would have told me that he is charging 2.5k for the first pair, and the other pair is for 0.0, my head would feel happy. After all, that's what I agreed on. The thing that created this confusion in my head was the fact that he charged 1.25k for each pair, which logically is the same, but is not a good reason to buy the two items in first place. I am at loss. The human mind hates losing. Two things have happened here :-
1) I bought two items, when I wanted one.
2) I paid 1.25k for each pair, and one pair wasn't that good.
The perils of free and discounts have treated my mind. The shopkeeper was happy. He was able to sell 2 items for a good price, rather than just one item (50% off one).
The only good thing out of this experience was the motivation to write a blog post about it. I am sure many of us had similar experiences but we never discussed the loss part of it. Its the success that gets Facebook updates and Twitter tweets, not the losses.

I would like to recommend the book "Predictably Irrational" to all of you. Go grab a copy and enjoy the revealing of the human decision making.