Interesting Take on Situational Spending
Re: Interesting Take on Situational Spending
“Compared to what?” is a powerful question. The right answer might not be, “compared to what I just spent a moment ago, or compared to what my peers are spending…” A more useful alternative could be, “compared to what I want or need to spend money on in the future.”
Re: Interesting Take on Situational Spending
Yes delay, anchoring bias can be powerful to resist.
Re: Interesting Take on Situational Spending
Anchoring bias can also work to your advantage. As an example, close friends of ours live on a single 762.9€/month net wage... with two adults and three children. In the European Union. We might not be able to reach that, but it does inspire.
Re: Interesting Take on Situational Spending
+1, use anchoring bias to your advantage. It's all about what you persuade yourself "the standard" and "normal" is.
It's interesting how algos deal with it. I do a lot of shopping online, and over time, the algo has figured out that I want cheap shit, and that i will add things to my cart then wait for cheaper suggestions. So, the algo would drop the price until I buy. (Location helps with this -- university campus, not so rich area of the country: the shopping patterns of those around me in my area help me get cheap suggestions. Im not sure if amazon and so forth western apps do the same, but it's yet another interesting synergy: living in a lcol region also gets you lower online shopping prices. I know this for a fact bc I've gotten products in an entirely different price range when I lived elsewhere in the same country).
Anywhoo: every now and then, the algo gets worried I'd get anchored too low. So it deliberately throws in a luxury retailer suggestion that I have never bought, never will, and likely, neither will any of the poor university students around me. I might be looking at clothes in the 10-20 price range, and suddenly im seeing a thing in the 1000-2000 range (but interestingly, not in the 10000-20000, which also exists). The trick here I assume is, "look, don't be picky for 5-7 Currency Units, you're still getting a good deal." It deliberately tries to unanchor me. Statistically, showing the 10x priced suggestion to people with my spending pattern causes their overall level of consumption to go up.
The moral is, as always, that being informed and aware works to one's advantage.
A second interesting thing to me is that as a species, we seem to psychologically need "a situation" (from "situational spending"). Humanity, independently, across a range of cultures, has come up with carnivals, festivals, holidays, occasions and so forth: designated times when it's alright to let loose and go all out, in all senses of the word. It's when you allow yourself the overpriced imported cherries and so forth. And drink and dance and be merry, I suppose. Does the hedonic treadmill somehow need that one isolated occasion to sustain the overall pattern? Idk. I don't yet know how to use it skillfully, but I've noticed it's a thing.
It's interesting how algos deal with it. I do a lot of shopping online, and over time, the algo has figured out that I want cheap shit, and that i will add things to my cart then wait for cheaper suggestions. So, the algo would drop the price until I buy. (Location helps with this -- university campus, not so rich area of the country: the shopping patterns of those around me in my area help me get cheap suggestions. Im not sure if amazon and so forth western apps do the same, but it's yet another interesting synergy: living in a lcol region also gets you lower online shopping prices. I know this for a fact bc I've gotten products in an entirely different price range when I lived elsewhere in the same country).
Anywhoo: every now and then, the algo gets worried I'd get anchored too low. So it deliberately throws in a luxury retailer suggestion that I have never bought, never will, and likely, neither will any of the poor university students around me. I might be looking at clothes in the 10-20 price range, and suddenly im seeing a thing in the 1000-2000 range (but interestingly, not in the 10000-20000, which also exists). The trick here I assume is, "look, don't be picky for 5-7 Currency Units, you're still getting a good deal." It deliberately tries to unanchor me. Statistically, showing the 10x priced suggestion to people with my spending pattern causes their overall level of consumption to go up.
The moral is, as always, that being informed and aware works to one's advantage.
A second interesting thing to me is that as a species, we seem to psychologically need "a situation" (from "situational spending"). Humanity, independently, across a range of cultures, has come up with carnivals, festivals, holidays, occasions and so forth: designated times when it's alright to let loose and go all out, in all senses of the word. It's when you allow yourself the overpriced imported cherries and so forth. And drink and dance and be merry, I suppose. Does the hedonic treadmill somehow need that one isolated occasion to sustain the overall pattern? Idk. I don't yet know how to use it skillfully, but I've noticed it's a thing.
Re: Interesting Take on Situational Spending
Interesting that you read the quote as about anchoring. I read it as about prioritization. Say you want to buy an item, which other choices are you foregoing by buying that item? So I read it as promoting a scarcity mindset. Don't evaluate based on what others are doing, but compare options you yourself have.
@ertyu's interaction with shopping algorithms is interesting. I didn't know a webshop adjusts prices based on behavior. I don't really like shopping, so when I have made up my mind to buy something, I compare prices and buy it. I don't monitor prices over a longer period of time.
@ertyu's interaction with shopping algorithms is interesting. I didn't know a webshop adjusts prices based on behavior. I don't really like shopping, so when I have made up my mind to buy something, I compare prices and buy it. I don't monitor prices over a longer period of time.