Making Decisions Is Hard

Should you view the video below or not? To make that decision you need to be able to estimate two things for yourself:

  1. What are the odds of benefiting from watching it?
    • You may have watched the other videos I’ve posted in this blog and hated them all, therefore the odds are low you’re going to benefit; or you’ve loved the other videos and the odds are high.
  1. What is the value of the benefit?
    •  You’re probably going to get this one wrong.

In 23 minutes, author and lecturer, Dan Gilbert discusses how we often get confused with valuing our options. Particularly valuing options over time, and making value comparisons to the past.

Comparison changes the value of things.  And while this talk was given 5 years before the launch of the iPad, I couldn’t help but see how well Apple do out of using comparison to sell products. With one iPad model, it’s very easy to value  it, much harder for Apple to get you to spend more. So for the first 3 years of the iPad, Apple introduced three models: 16gb, 32gb, and 64gb. Now comparison makes it easy to miscalculate value when decision making. If I buy the cheapest model then I’ll feel cheap, but hell the most expensive model is pricey and I’m going to feel a little ripped off. That 32gb middle option (that Goldilocks option neither too hot nor too cold) that’s the one I’ll buy, I won’t feel cheap but I will feel like I’ve saved some money. Apple, of course, just sold me the same thing with £8 worth of additional memory for £80 more. It’s a very prevalent and effective retail concept. I wonder now with a 4th option of 128g super priced iPad Air added to the comparison, how many more 64gb models Apple will sell, dragging more of us to a higher spend.

A facscinating discussion that goes beyond just retail, and touches on our response to everyday danger, terrorism, and buying lottery tickets.

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