Try this exercise ;
1- A shopkeeper offers you a pack of video cassettes for 10$.
You know there is a store a few minutes drive away where you can
get exactly the same for 7$ – 30% less .
Would you make the journey ??
2- A shopkeeper offers you a video – recorder for 1000$ > You know
there is a store a few minutes drive away where you can get exactly the
same for 997$ -3% less would you make the journey ??
Most people say yes to question 1 and no to question 2 .
in the first case the motivation to go to the other store is not a purely
rational desire to save 3$. A 3$ saving is available in the second case
too_ rationally the same reward for the same few minutes in your car.
The real motivation is something like: I wont enjoy using these video
tapes if I feel i have been suckered
in the second case you are in the store face to face with the salesman and
about to spend big money on a luxury item.
Most people are disinclined to spoil the experience by acting like a
It is often difficult to convince people that they act irrationally in
negotiations . participants on training courses usually insist to the
bitter end that all their moves are considered wise and purposeful. they
would drive around the block to save 30 per cent but not to save 0,3
per cent they say _ a rational distinction . but you do not carry
percentages in your pocket
you carry money and for 3$ however you save it you can buy a cup of
coffee and a piece of cheesecake .