Posts tagged economics
“ Instead of opposing redistribution because people expect to make it to the top of the economic ladder, the authors of the new paper argue that people don’t like to be at the bottom. One paradoxical consequence of this “last-place aversion” is that some poor people may be vociferously opposed to the kinds of policies that would actually raise their own income a bit but that might also push those who are poorer than them into comparable or higher positions.”
Economics focus: Don’t look down | The Economist
This makes so much sense it’s sad.
“ What if the modern, postindustrial economy is simply more congenial to women than to men? For a long time, evolutionary psychologists have claimed that we are all imprinted with adaptive imperatives from a distant past: men are faster and stronger and hardwired to fight for scarce resources, and that shows up now as a drive to win on Wall Street; women are programmed to find good providers and to care for their offspring, and that is manifested in more- nurturing and more-flexible behavior, ordaining them to domesticity. This kind of thinking frames our sense of the natural order. But what if men and women were fulfilling not biological imperatives but social roles, based on what was more efficient throughout a long era of human history? What if that era has now come to an end? More to the point, what if the economics of the new era are better suited to women?”
The End of Men - Magazine - The Atlantic
Worth reading.
I am reading Dan Ariely’s fantastic book Predictably Irrational and was struck by how adding irrelevant choices can influence consumer behavior. Take, for instance, the above chart which offers consumers three subscription choices. Which would you choose? Not surprisingly, out of 100 MIT Sloan students a total of zero people chose “Print Only.” 84 chose the “Print and Electronic” subscription, while 14 chose “Electronic Only.” So why even have the dumb “Print Only” option?
Here’s where it gets interesting. If you reduce the choices to just two: $59 for an “Electronic Only” subscription or $125 for a “Print and Electronic” subscription, a staggering 68 picked “Electronic Only” and only 32 went for “Print and Electronic.” At work is the mind’s preference for comparing two like objects and having a deep attraction to getting something for free. (That “Print and Electronic” subscription looks like an absolute steal compared to the “Print Only” subscription).
This goes with another article I recently read about “the death of free” - or rather, using freebies only as promotional tools and not in and of themselves. But the fact is, that free has always been a promotional tool, whether it’s a band giving away mp3s for free in hopes that people will come to their concerts, or newspapers giving away online content for free in hopes that people will subscribe to the print edition. It’s simply an illusion that things are “free for free’s sake” - and a very good one at that, as “free” has become an institution on the web.
Now the trick is to get people to think that they’re still getting something for free, while building a sustainable model.
