Valooo?

[kinboshi]

I think I read the same books as you...

Good isn't he?  Was reading this bit today and then thought if there's a group of people who act irrationally with their decisions surrounding money, it has to be poker players.

So what would the rational decision be? And which book are you on about?

Just mentioned the book above.

In terms of what the rational response is, well that depends.  Something like 80% of people questioned on this would come back for the kettle, but buy the laptop. He doesn't go into too much detail beyond that to be honest. 

Of course, if your time's more important than the money saved you should probably just buy both and not worry about the saving.  But if the saving is worthwhile to you, it's irrational to consider going back for the kettle but not for the laptop, when the figure that should matter is the total amount you spend/save - rather than saving a smaller amount on a cheaper item even if it's a higher percentage of the price of that item.  Of course, sometimes we pay over the odds for something because the utility of that item is worth a lot to us (or we perceive it to have a high utility value).  We might pay a few hundred quid more than we know we should on a used car if we find one that's "perfect"; the same goes for a house that might be quite a few thousand over the 'market value', but if we don't buy it for that price we run the risk of someone else snapping it up and us losing out on our "dream home".

Cf mentioned the service station and their prices - and it's a very good example.  I hate the way they hold their captive audience to ransom by over-charging for things.  Yes, I know they have overheads, but I'm sure it doesn't justify the inflated prices.  Same goes for WHSmiths at train stations.  I resent paying over a pound for a can of Coke, but am quite happy buying a glass of coke in a pub for a few pound (obviously not happy, but I don't question it).

[kinboshi]

Spite buy all the kettles then come back tomorrow and laugh at the nits complaining that there aren't any left.

That'll really annoy Mr Ho.

[paulhouk03]

Spite buy all the kettles then come back tomorrow and laugh at the nits complaining that there aren't any left.

That'll really annoy Mr Ho.

yeah but it will be funny that matt bought 30 kettles full price just to spite me

[Moskvich]

Would be great if the researchers did find themselves asking a load of poker players and got these responses. I think there'd be a lot of deep breaths, and "Perhaps we could start again"s.

Always thought houses were a bit weird in this sense - people worry about wasting ten quid on a kettle, but not twenty quid on a laptop or two hundred on a car. But then they want to negotiate a grand or two off a big house, which is far less in percentage terms than either the kettle or the laptop, and will probably cost them about a fiver a month on their mortgage.

I guess it isn't really down to the outright saving, more to do with feeling like they've made a fair trade and haven't been ripped off, which obviously has a value to most people. I suppose some economists would like to see that as somehow irrational and therefore interesting, which it kind of is, but maybe not as much as they'd like to make out on the blurb of their books.

[mondatoo]

Buy both then. I would've went to buy both in a taxi, so wouldn't save anyway.

[kinboshi]

Would be great if the researchers did find themselves asking a load of poker players and got these responses. I think there'd be a lot of deep breaths, and "Perhaps we could start again"s.

Always thought houses were a bit weird in this sense - people worry about wasting ten quid on a kettle, but not twenty quid on a laptop or two hundred on a car. But then they want to negotiate a grand or two off a big house, which is far less in percentage terms than either the kettle or the laptop, and will probably cost them about a fiver a month on their mortgage.

I guess it isn't really down to the outright saving, more to do with feeling like they've made a fair trade and haven't been ripped off, which obviously has a value to most people. I suppose some economists would like to see that as somehow irrational and therefore interesting, which it kind of is, but maybe not as much as they'd like to make out on the blurb of their books.

There's definitely a large element of not wanting to feel ripped off.  That's probably the driving factor for many with the kettle scenario. Even though it's not a lot of money, they'll "know" they could have got it cheaper.  I've done it before - I bought a telly, and then saw the same one £30 cheaper elsewhere and my immediate reaction was to be annoyed.  I was happy with my purchase before seeing the cheaper price elsewhere - why should I be unhappy now? 

[pleno1]

Spite buy all the kettles then come back tomorrow and laugh at the nits complaining that there aren't any left.

rofl

[Bongo]

Ah I was on about Predictably Irrational by Dan Ariely (couple of talks by him here if you're interested: http://www.ted.com/speakers/dan_ariely.html) which covers similar points.

[Claw75]

girgy's gonna have a heart attack when he sees how many people would pay £20 for the kettle!

[kinboshi]

girgy's gonna have a heart attack when he sees how many people would pay £20 for the kettle!

It was a calculator in the book, but your kettle-buying discussion inspired me to change it

[mondatoo]

girgy's gonna have a heart attack when he sees how many people would pay £20 for the kettle!

My brother who is pretty much always busto got 2k compensation a little while ago, decided to buy a kettle and a toaster for £80 each. WTF is that about ?

[George2Loose]

girgy's gonna have a heart attack when he sees how many people would pay £20 for the kettle!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

fyp

[gatso]

girgy's gonna have a heart attack when he sees how many people would pay £20 for the kettle!

It was a calculator in the book, but your kettle-buying discussion inspired me to change it

I wouldn't pay anything for a calculator. I'd either work it out in my head or use the one on my phone/lappy

[Claw75]

girgy's gonna have a heart attack when he sees how many people would pay £20 for the kettle!

It was a calculator in the book, but your kettle-buying discussion inspired me to change it

I wouldn't pay anything for a calculator. I'd either work it out in my head or use the one on my phone/lappy

what if it was a scientifc calculator tho?

[gatso]

the one on my lappy has 4 modes one of which is scientific. 3 of the 4 modes have buttons I will never use