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I've been very interested in the behavioural economics field in general, but for some reason I always find that Ariely tends to jump too fast to conclusions. M

I've been very interested in the behavioural economics field in general, but for some reason I always find that Ariely tends to jump too fast to conclusions. Most of his experiments I read about have other explanations that fit the data just as well. For instance, the "The Economist" subscription has another explanation to simple comparison, choice deferral. People don't really know if they'll want the online or print version, so are happy to pay extra for not having to make that choice now. If you only give them the two choices, you force them to choose. I'm not saying he is wrong, just that I miss him considering other alternatives (that to me sound way more plausible, but are less publication-sexy).

ced 6y ago
I don't get your argument. Those who are in "choice deferral" and chose online+print in the first experiment ought to have picked the same in the second experiment, but they didn't.
- xondono 6y ago
  If you make me chose right now between online and print, I need to think which of those suits me better, will I read on my phone? Would I rather have the physical thing and have some rest time from the screens? If there’s an easy to pick offer bundling the two, I’d rather pay the extra to keep the choice open, that is, to choose later.
  - theplague42 6y ago
    But that's not what happened! When the print-only option was removed, people switched to the cheap online-only option. I recommend you re-read the description of the study.
mekoka 6y ago
Regarding choice deferral, perhaps you should take another closer look at that experiment. It seems to me that you may have missed the fact that the choice that was taken away is not "online + print", but rather "print only", which yielded 0 subscribers in the original batch.
- xondono 6y ago
  I didn't, think of it this way: In the first experiment I can choose if I'd rather have online (59$) or print version(125$). Either way I'm risking the disappointment of taking the wrong choice, or I can choose online for 59$ plus a 66$ hedge against choosing wrong. In the second experiment you've eliminated the risk of choosing print and realizing later that I wanted online, so hedging makes less sense (i.e. I'm willing to pay less for hedging my choice).
zeroonetwothree 6y ago
This is a very good point that is often overlooked. Many “irrational” actions may actually be much more rational when interpreted a differently way. For example, loss aversion is totally rational since money has diminishing marginal utility. (And studies have mostly disproven loss aversion with small amounts) Another issue with experiments is that they are not realistic scenarios. For example, in the Economist experiment no one actually paid any money. Which makes it basically worthless. We’ve often found in economics research that what people say they will do and what they actually do is very different. Moreover, studies only find that some % act irrationally but then it’s reported as if everyone did. Now obviously humans are not totally rational, but it does us a disservice to act as if we are so terrible at decisions all of the time.

ced 6y ago

I don't get your argument. Those who are in "choice deferral" and chose online+print in the first experiment ought to have picked the same in the second experiment, but they didn't.

xondono 6y ago
If you make me chose right now between online and print, I need to think which of those suits me better, will I read on my phone? Would I rather have the physical thing and have some rest time from the screens? If there’s an easy to pick offer bundling the two, I’d rather pay the extra to keep the choice open, that is, to choose later.
- theplague42 6y ago
  But that's not what happened! When the print-only option was removed, people switched to the cheap online-only option. I recommend you re-read the description of the study.

mekoka 6y ago

Regarding choice deferral, perhaps you should take another closer look at that experiment. It seems to me that you may have missed the fact that the choice that was taken away is not "online + print", but rather "print only", which yielded 0 subscribers in the original batch.

xondono 6y ago
I didn't, think of it this way: In the first experiment I can choose if I'd rather have online (59$) or print version(125$). Either way I'm risking the disappointment of taking the wrong choice, or I can choose online for 59$ plus a 66$ hedge against choosing wrong. In the second experiment you've eliminated the risk of choosing print and realizing later that I wanted online, so hedging makes less sense (i.e. I'm willing to pay less for hedging my choice).

zeroonetwothree 6y ago

This is a very good point that is often overlooked. Many “irrational” actions may actually be much more rational when interpreted a differently way. For example, loss aversion is totally rational since money has diminishing marginal utility. (And studies have mostly disproven loss aversion with small amounts) Another issue with experiments is that they are not realistic scenarios. For example, in the Economist experiment no one actually paid any money. Which makes it basically worthless. We’ve often found in economics research that what people say they will do and what they actually do is very different. Moreover, studies only find that some % act irrationally but then it’s reported as if everyone did. Now obviously humans are not totally rational, but it does us a disservice to act as if we are so terrible at decisions all of the time.