3 ms·
> Which would you prefer in general: Being forbidden from doing something at all, or allowed to do it at high cost? Under standard economic theory, the latter s
by bambax 9y ago
> Which would you prefer in general: Being forbidden from doing something at all, or allowed to do it at high cost? Under standard economic theory, the latter should always be better. In the first scenario, you have one option: don't do it. In the second, you have two options, including the same option as before.
This is not how the human mind works.
One part is obvious: would you rather starve, with no options, or starve in front of a beautiful cheesecake, just out of reach? Or worse, in front of a cake out of reach to you, but with other people feasting on it? This is not just "envy", it's loss, in the second case we're losing out and we're extremely loss adverse.
The other part is less obvious but no less real: we average the cost of options. A set of 11 plates with one of them broken is worth less to buyers than a set of 10 good plates, because the average value of 1 plate in the first case is less than in the second one. This has been demonstrated many times.
When you go from one option at no cost (slow lane) to one free option + one paying option, then the perceived value/cost of the "free" option isn't free anymore, it goes up because people average the cost.
(That said, tolls are probably the best possible solution; but the transition is always going to be painful).
- im3w1l 9y agoEven fully rational people can prefer less options. According to game theory you're better off without a steering wheel in "chicken". And while credible threats may be uncommon, removing the possibility of defection for a group of people seems like a very common potential for gain.
- eru 9y agoAnother interesting example of pre-committing to less options: sending an agent to negotiate for you. Eg the company service rep you are talking over the phone can play the 'good cop' all day long and be nice and polite; but to make any decisions they have to call their manager, who can play the 'bad cop' or defer to 'company policy'. (Not very relevant to the road charging example here, though.)
- lgbr 9y ago> One part is obvious: would you rather starve, with no options, or starve in front of a beautiful cheesecake, just out of reach? Choices made when consequences are so extreme, especially in life or death scenarios, are often different than everyday decisions. A life or death decision would have zero risk tolerance. For example, in a work environment, one strategy people like to choose is to never say that something is 'impossible', but rather that something has a particularly high price. People are much more comfortable hearing that the effort/costs of doing something aren't for them, rather than feeling like they have no choice at all.