Economy, Insights, IT, Knowledge, Future

Predictably Irrational by Dan Ariely

. Monday, June 15, 2009

Below’s example is sourced from Dan’s Presentation from You may checkout the full presentation here.

Firstly, try to look at a simple subscription form at


Anything wrong?

There are 3 options here.

  1. Web subscription for USD 59.
  2. Print subscription for USD 125.
  3. Print and web subscription for USD 125.

Now, your immediate attention is drawn to the comparisons of option 2 and 3. What kind of idiot will design this kind of options? It’s so obvious that nobody will ever choose options 2 right?

You’re absolutely right if you think this way. After all, 100 MIT students who were asked to choose amongst the options above, the result is as below:

  1. Option 1 : 16%
  2. Option 2 : 0%
  3. Option 3 : 84%

So, why don’t we just remove option 2?

Well, Dan Ariely, a behavioral economist did exactly that and retest the whole experiment again. This time, with just 2 options, the result came back as :

  1. Option 1 : 68%
  2. Option 3 : 32%

WOW! What just happened?

It turns out that when there were 3 options, the option 1 is mostly ignored. Instead, most people will zoom into option 2 (being the lesser intelligence option) and compared it against option 3. Nobody was actually comparing option 1.

Now, let’s start incorporating Option 2 into our life. (Eg. Bring a lesser attractive version of you to the bar and compare it against you. )

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