Posts Tagged ‘TED talks

22
Feb
09

Shifting Comparison

Quoted from TED-talks by Dan Gilbert in 2005,

“You want to buy a car stereo . The dealer near your house sells it for $200, but if you drive across town, you can get it for $100. Would you drive for 50% off?”

Needless to say, most people will answer “Yes”. But what about the analogy below?

“You want to buy a car with a stereo. The dealer near your house sells it for $31000, but if you drive across town, you can get it for $30900. Would you drive to get .003 % off?”

Most people will answer “No” despite the fact that they save the same $100 in both cases.

The problem is, as Dan Gilbert said, the money we save can’t talk where it is saved from. Whether it is from buying a car stereo, or from buying daily goods. But why the answer is different for those two questions.  Do percentage really make it different? Or is it the value?