I see a sale sign, and my hand involuntarily reaches for my wallet. I’m not ready for a shopaholic 12-step program yet, but I do have a few great deals hanging in my closet that I’ll never wear.
The truth is that if suddenly (heaven forbid!) I had to pay full-price for all my clothes, I’d think more carefully and spend less.
Shopping at sales is just one of the ways I fool myself when it comes to money. And I am not alone.
“There’s one way to be rational about money and many, many ways to be irrational,” said Dan Ariely, a professor of behavioral economics at Duke University.
Some people fool themselves to the point of ruination — those who run up huge credit card bills and pay only the minimum, ignoring the fact that the high interest they are being charged means they are paying many times over for the same item. Others try to fool their spouses. I have a friend who, when she’s buying more than she ought to, pays for it with cash so her husband won’t see it on the credit card bill.
But there are smaller ways we deceive ourselves as well, ways we’re often not aware of.
Professor Ariely has found that the word “free” acts like a drug for many people.
“It’s no secret that getting something free feels very good,” he wrote in his book “Predictably Irrational.” “Zero is an emotional hot button — a source of irrational excitement.”
In an experiment, Professor Ariely and his colleagues priced Swiss Lindt chocolate truffles, which cost about 30 cents when bought in bulk, at 15 cents, and less expensive Hershey Kisses — a less tasty option, many would say — at 1 cent each.
When customers flocked to the tables, they made what would appear to be fairly rational choices…
