My present work demands a lot of travel–mostly to India. I carry an Indian SIM so that I can be connected with my friends and family when I am not in the country. The last time I arrived at Delhi airport, I was happy to have the Indian SIM with me. I was planning to say hello to my wife, Anu, as soon as the plane landed, but found that my phone’s battery had died! I thanked my luck when I found a phone charging outlet installed by a local telecom service provider inside the airport. [break]
I stayed inside the airport for 15 minutes more, charged my phone (partially), called my wife, and exited the airport happily. I was wondering why a telecom service provider would install a phone charging outlet. Is this true service, or something else? The incident reminded me of a famous quote from a book Freaknomics by Steven D. Levitt & Stephen J. Dubner, “humans respond to incentives.” I guess there is no incentive to a telecom service provider if my phone dies. But there is certainly a subtle incentive for them if my phone doesn’t run out of battery. Because dead phones means no call, and no call means no income to service providers.
The cost of installing a phone charging outlet, for a service provider, is less than letting phones die. We think the telecom service providers are so obliging, but that is an illusion.
photovide.com
Buying a Digital Single-Lens Reflex (commonly known as DSLR) camera was a dream for me. I had an opportunity to buy one after almost a decade of planning. I was elated that day. I went with a friend to forage for one in the market. We found two similar products from a renowned DSLR camera manufacturer. Both looked similar, but the price was different. According to the shopkeeper, one was an amateur camera while the other was professional. The professional camera came with additional image processing software. I bought the professional camera at almost double the price of the amateur one, to prove that I was a professional photographer (which I was not). But the reality was different. The professional camera did not come with additional image processing software, but the amateur camera came with disabled image processing software.
Tim Harford, author of the book The Undercover Economist, writes that when manufactures need to sell two different products, they often do not produce two products. Instead, they produce a single product in large quantities and sell it in two different prices. This is always cheaper than designing and producing two completely different products. In his book, he presented an example of IBM’s LaserWriter printer. According to him, the low-end laser printer (cheaper one), was exactly the same piece of equipment as the high-end printer (expensive one), except there was an additional chip in the cheaper version to slow it down. Yes, shopping is an adventure, and we need to understand such external illusions to avoid wasting our money.
One frigid Sunday afternoon, I was watching a movie at home. Someone knocked on our door, and I went to open it. It was a saleswoman with some household goods like mixer-grinder and toaster. She tried her best to sell those, but we didn’t buy them because we thought the products were useless and not durable. If those products were good and durable, why would she have to make door-to-door visits to sell them? After a couple days of her visit, we bought an identical mixer grinder from a well-known shop (unfortunately, I could not convince my wife that the products were the same). Coming to your doorstep to sell a product does not mean that it is inferior, but we often assume it to be. David Smith writes in his book Free Lunch that if anyone offers a nearly new car, the buyer immediately assumes there must be something wrong with it. He adds that this applies even if the car is perfect.
Once, I heard this question in a comedy serial: Two workers finish their duty and come out from a coal mining location, one with coal dust on his face, and another clean. Which one of them will go to wash his face? The most immediate answer may be the one with the dirty face, but think about it. After seeing his colleague’s dirty face, the one with the clean face assumes his face is dirty too, and goes to wash it. The one with coal dust on his face probably thinks that his face is clean like his colleague’s, but the reality is different.
Imagine you are meeting a person for the first time in your life. This person has a moustache and a beard, with a few gray hairs. He also has a big belly sticking out. If you have perfect body mass index then there is the possibility that you think this guy is older than you. But this might not be the truth. He could be simply overweight and prefers not to shave.
We encounter many such illusions every day; some created by market mavens to rip you off (like the DSLR camera), some created by the given context (like in the case of coal miners). Illusions tend to subvert your decision making ability. I cannot prescribe a remedy to get rid of such illusions, because I don’t know any. The best way to combat them is to analyse all available information before making any decisions.
uanumalakar@gmail.com
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