Is Free Worth It?
I’ve become obsessed with getting free things.
It’s one of my methods of saving money. I’ll take free samples at cosmetics counters. I’ll take free books from the laundry room where people leave things they don’t want anymore. And whenever I go to a house party or book party that I know will have a buffet table, I won’t bother going out to dinner knowing that I’ll get food for free.
I recently wrote a story about people like me. I called them mooches. I guess I have to count myself as one.
But sometimes I ask myself: Do I really need to add another book to my already big collection? I mean, I haven’t even read all the books I own. And is all that free food really worth the calories?
As I was doing research for another blog item, I came across a paper co-written by Nina Mazar, an assistant professor of marketing at Joseph L. Rotman School of Management at the University of Toronto.
She and two co-writers--Kristina Shampanier of the Massachusetts Institute of Technology and Dan Ariely of Duke University—tried to figure out the true value of free products.
When faced with the choice of several products, people will normally subtract the cost from the benefit. “This will decide whether I buy the product and how much I will like it,” Mazar said.
Yet decisions about free products differ, she said. People don’t figure out what the net benefit is. Instead, they immediately assume that the benefit of the free product is higher even if it is not.
“It seems that when there is something for free it not only manipulates the cost side and reduces the cost, instead it actually seems to increase the intrinsic value that we get from that product,” Mazar said.
Is that healthy? I asked. “I guess it depends a lot on in which context, what kind of products we’re talking about. It can work out well if it’s about healthy food or if you get the membership for a gym for free,” Mazar said. “The problem is that I think it’s almost like we’re not thinking that much anymore. When something is for free we go for it … If it is free it must be good, and it would be a mistake not to take it.”
It’s funny how figuring out our finances requires not just an understanding of math but of psychology.
So the next time you, or I, grab something for free, let’s think about whether or not we actually need it.
Posted by: carolebert3 | July 15, 2009 2:38 PM | Report abuse
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