1.The Truth About Relativity⚓︎
tl;dr
- Humans can't decide on absolute terms and need to know the relative advantage of one over the other to make a choice. In other words, we are good at eliminating.
- We do not just compare, but we do compare things which are more easily comparable, thus by planting a decoy1 it is easy to let one pick what we want them to pick.
- The more we have, the more we want. And the only cure is to break the cycle of relativity.
This chapter begins with describing how Economic times offered different membership choices which tricks a reader to spend more money than one would actually do by planting a decoy1. The membership as follows:
| Membership Type | Description | Price |
|---|---|---|
| Internet Only For 1 Year | Only web access + all old archives | 59 $ |
| Print Only For 1 Year | Print Only Access | 125 $ |
| Internet + Print For 1 Year | Print + Web + all old archives | 125 $ |
Guess what most of the people do pick?, of course the 3rd option.
The author explains the above behavior how humans can't choose on absolute terms. They need to compare, they need to evaluate. They need to know the relative advantage of one over the other to make a choice. As we do not know whether 59$ for Internet only subscription is worth or not, but we do definitely know that 125$ subscription for Internet + Print subscription is much better than 125$ for Print only subscription.
That's how the author introduces us to Relativity, he further explains the important aspect of the Relativity that We not only tend to compare things with one another but also tend to focus on comparing things that are easily comparable - and avoid comparing things that cannot be compared easily.
He describes the above by running an experiment on students to choose the beautiful faces out of 3 choices that are presented. A which is actual and as beautiful as B and -A which is the decoy1, a modified version of A. As you might have guessed by now, most people tend to pick A as it is easily comparable to -A.
He further explains that ones' happiness is not dependent on how much they earn, but by how relatively superior they are to the closely comparable decoy.
The author describes the above by adding we look at our decisions in a relative way and compare them locally to the available alternative. The easy way to understand this is how we justify how much we are getting paid at work by comparing it to the equally qualified person and find our happiness at how much more we are making in our circles.
The author further makes us understand this behavior directly by shooting us a question -
Question
Would you like to travel about 2kms to save around Rs. 50/- to buy exactly same pen which would otherwise cost you about Rs. 70/- ?
Well, the answer to it depends on lot of factors, but if I have to simplify this, yes definitely I would travel 2kms to buy the pen for 20/-.
Yes, I would. Wait a second, do you mind traveling about 2kms to save around Rs. 50/- to buy a suite which would otherwise cost you about Rs. 1550/- ?