eli5 Why do humans love to feel that they “got a deal “on something?


Whats the psychology behind this

In: 3

Me: “I paid $10 for this.”
Other person: “Really? I paid $20.”

Now I know that there’s $10 in my pocket that I *could* have had to spend on the thing, but instead it’s still in my pocket. That’s a better position to be in.

Because the individuals who enjoyed the feeling of getting a deal on something tended to do better in nature so they outnumbered the ones that didn’t because they had more kids and longer lifespans, so basically natural selection.

Pretty much any question you might have about biological organisms is answered by “because natural selection”.

Although natural selection might select for a certain trait if it’s “hardcoded” like an instinct it might not work anymore if you change the organisms environment, so that would be what a bias is. So we have evolved biases like looking for relative value as that would be helpful to judge most of the time, but when it’s not it could cause us to make an illogical decision.

But you know, even a broken clock shows the right time two times a day, so if that’s enough for natural selection to not push for better it’s good enough.

There’s a whole field of study around some of the seemingly illogical choices humans make called behavioral economics. If you’re interested in this subject, look up Daniel Kahneman, Amos Tversky, and Richard Thaler.

I think a simple explanation is that there is a TON of information being thrown at us all the time. Our brains, like computers, can only handle so much. So we create “shortcuts”. Most of the time, these shortcuts work just fine – hence the reason they exists. But sometimes they cause humans to do weird things

With your example, there’s what caused the “anchoring effect”. Essentially, the price that we’re told something should be sold for is what we label as the default. So telling someone that something should cost $100 but they can get it for $75 can make it feel like they are getting a “good deal” even though none of that should really matters. What should matter is whether or not you think it is worth $75, not how much of a “deal” you got.

Look up the recent history of JC Penny. They are notorious for everything being on “sale”. A while back, a new CEO tried to get away from this and just price items properly. And their customers hated it. It turns out, many people want to pay $75 for a product that is normally priced at $100 than they do for that exact same product that is simply priced at $75.

People are weird. In our defense though, our brains would probably freeze up if we tried to process every bit of information and try to come to logical answers for everything. Our brains essentially exists for one reason – keeps us alive so we can reproduce. Anything beyond that is just a kind of nice thing to have.

A lot of animals have been shown to practice bartering. Getting a reward feels good. Better than getting nothing.

Humans actually have an aversion to risk. We hate gambling safety for even a big reward. This can be connected to evolution. Animals don’t leave their territory unless faced with an existential threat.