The importance of irrelevant alternatives

The importance of irrelevant alternatives

In a lively and illuminating TED talk, behavioural economist Dan Ariely explains that he was intrigued by a puzzling set of options our website once offered prospective subscribers: You could get access to all our web content for $59, a subscription to the print edition for $125, or a combined print and web subscription, also for $125. Intuitively, the offer of the print-alone option seemed absurd. Nobody, even a staunch luddite, would rationally choose to forego web access when it costs nothing extra, so why even list it? Why not just say that the print subscription also includes access to the web archives?

I’m not sure whether this is what the paper’s marketing people had in mind—though subscription offers are no longer structured this way—but Mr Ariely discovered something intriguing when he surveyed students about which option they preferred. Predictably, nobody chose print subscription alone; 84% opted for the combination deal, and 16% for the web subscription. But then he repeated the poll without offering the unpopular print-only alternative—after all, nobody was choosing it, so what difference could it make to leave it out? The second time around 32% wanted the print subscription, while 68% preferred to go web-only. It appears that the presence of the clearly-inferior option altered the decision process by making the combined web and print subscription seem like a better deal. And Mr Ariely has discovered the same effect in a range of situations, covering travel decisions and even our ratings of physical attractiveness. (Apparently, you’ll seem more attractive if you are accompanied by a sibling who looks similar to you, but a bit uglier.)

2 comments
  1. More examples of irrational behaviour can be found at Ariely’s book: Predictably Irrational. Some possibly interesting notes on the book for your Greek audience: http://www.amarkos.gr/blog/2009/01/295/

  2. MadNihilist said:

    Very interesting – thanks! (btw I fear that over 90% of the audience is Greek. =)

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