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That difference is just a psychological one. The end result is still people with a parking spot have $300 less than people without a parking spot. It doesn't ma
by craftkiller 9y ago
That difference is just a psychological one. The end result is still people with a parking spot have $300 less than people without a parking spot. It doesn't matter which side you call the baseline.
- decker 9y agoNope, people that choose the $300 are now earning an extra 3600 per year. Explain to me how that's just a psychological difference.
- URSpider94 9y agoThe psychological difference is that people react differently depending on whether the fee is seen as "not receiving a bonus that other people got", or "taking a pay cut when others didn't." If that doesn't make sense to you, I highly recommend that you pick up a copy of "The Paradox of Choice," a book that lays out neatly how the human brain can be manipulated by simple restatements like this.
- ncallaway 9y agoYes, but psychologically it _does_ matter which side you call the baseline. Loss aversion is a real thing. People _hate_ losing a thing they have. So if you make parking a reservation system and then give a $300 credit to all employees who don't make a reservation you'll get much less blow-back than if you raise everyone's pay by $300, and then charge $300 to reserve parking. I think saying it's "just" a psychological difference really undervalues that aspect. After all, the goal is to create market efficiencies _without_ upsetting people. Solving the psychological problem is really the key to keeping people happy with the new system.