Why many products are always “on sale” – and why buyers fall for it

My wife and I had a running joke going for a while with the Kohl’s circular that would come in the Sunday newspaper: every week was “the biggest sale of the year!” This is a common strategy for many retailers and consumers continue to fall for it:

“People don’t have a gut sense of absolute value. It’s just that they’re sensitive to contrast. So if you say I’m getting 40 percent off, I’m interested, no matter what the actual cost is.”

“The whole concept of a sale or a discount has become really perverted,” said Shell, a co-director of Boston University’s Center for Science & Medical Journalism and a contributing editor to Atlantic Monthly. “So what is the price? We think of price as a number, something that’s coolly objective, but it’s not. It’s a highly emotional construct. Price is manipulated to attract the consumer.

“If people see a sweater on a table for $50, they don’t buy it. If they see the same sweater was once $100, they will. We’re highly swayed by reference price. … There are some things that are almost perennially on sale, like mattresses and jewelry. We buy almost all our clothing on sale.”

“Retailers are now outfoxing consumers,” said Kit Yarrow, chair of the psychology department at Golden Gate University, where she is a jointly appointed professor of both psychology and marketing. “They’ve figured out how to offer a bargain in a way that the consumer doesn’t even know what they’re buying anymore.”

So how could consumers fight back? Some common strategies:

1. In certain areas, like credit card offers and statements or the calories in restaurant meals, having sellers display more information so that the consumer can theoretically make more rational decisions based on more information. Do all consumers use this information? Does the extra information “wear off” over time, particularly in light of enticing promotions or marketing? You can hear the same argument about health care from some people – if everyone knew, doctors and patients, how much every test or treatment was going to cost, different choices would be made.

2. Use an envelope system (or a debit card) for spending money so that one has a better idea of the total spending limit. This may help overspending but does it help eliminate all “impulse buys” or the deals one purchases?

3. Aren’t consumer education classes in high schools supposed to help talk about finances and such? And do they help much? Do such classes typically talk about how marketing works and different ways to think about deals?

4. There are companies that claim to not offer deals and have “no-haggle prices” or something like that. Think of CarMax or Saturn. Since most other retailers do offer deals, some companies can take an opposite tack.

The conclusion: prices are a social construction and taps into basic human impulses to avoid losses (paying the higher price)

A sociologist against the idea of closure

Via BigThink.com, I stumbled across a sociologist making an interesting argument: “closure” is a cultural construction. This sounds both controversial and fascinating as it draws attention to a topic that we don’t think much about: how to grieve and deal with loss as individuals and, perhaps more interesting for sociologists, as a culture.

Two quick thoughts:
1. I would guess Berns argues that closure is more of a cultural development than an actual experience a person has and is emblematic of a therapeutic American culture that emphasizes “moving on.” But I’ll have to read the book to find out. Developing personal or collective memories about traumatic events can be interesting topics to study, as the growing field of the sociology of disasters illustrates.

2. Looking at the blog that accompanies the book, I wonder how much demand Berns will be in with the upcoming September 11th memorials. On one hand, some could find her take on grief to be reassuring and needed. On the other hand, some might be angry. If she does become part of the media circus surrounding the commemorative, I hope she can push a sociological perspective on the proceedings.

Os Guinness on how evangelicals view and use sociology

Os Guinness tries to explain how evangelicals view and use sociology:

CP: How are we as Christians failing to live the Way of Jesus?

Guinness: Sadly, when we look at many movements within evangelicalism today, the world and the spirit of the age are dominant, rather than the Word and Spirit.

I feel this very deeply as one trained in the social sciences. When I wrote “The Gravedigger File” nearly thirty years ago, very few evangelicals knew much about sociology. It was considered a “dangerous” field, along with psychology. Now it is cited almost universally, especially in the constant quoting of the latest statistics. I have heard mega-church sermons in which “Gallup or Barna says” far out-stripped “God or the Bible says.

But whereas sociology was once unused, it is now used uncritically. One of the key places where sociology should be used is in analyzing “the world” of our times, so that we can be more discerning. To resist the dangers of the world you have to recognize the distortions and seductions of the world. I have revised and updated my book under a new title, “The Last Christian on Earth”, but understanding the world through cultural criticism, as this parable encourages, is still unfashionable. Rather than use sociology that way, most pastors use it in a way that leads to adapting to the world, and they are encouraged to do so by half-baked versions of “seeker-sensitive” mission, and so on.

Guinness suggests sociology is used by evangelicals in several ways:

1. As a source of data. Several commentators have suggested in recent years that this data is often used in an alarmist way and to rally people to a particular cause or way of thinking. See an example here.

2. It is used by religious leaders who are trying to adapt or connect to culture rather than critique or understand culture.

From what Guinness is saying, it sounds like evangelicals are taking what they want from sociology rather than engaging with some of the bigger ideas and methods of the discipline. This seems to fit with the pragmatic culture of evangelicalism that is always looking for ways to reach the broader culture without thinking everything through.

I would also argue with the suggestion that sociology is no longer viewed as “dangerous” by many evangelicals. They may hear sociological snippets at church but I think there is still a decent amount of resistance and more so than psychology.

Quick Review: Scorecasting

I have written about Scorecasting several times (see here and here) so I figured I had better read it. Here are my thoughts on what I read about “the hidden influences” in sports:

1. This book truly aims for the Freakonomics crowd: there is a blurb both at the top of the cover and the back from Freakonomics author Steven D. Levitt. Those University of Chicago professors stick together…

2. I know that I have heard a number of these arguments before, particularly ones about why football teams should not punt, the unfairness of coin flips at the beginning of overtime in the NFL, and the phenomenon of the “hot hand.” Perhaps this indicates that I read too much sports news or that the sports world in recent years really has taken a liking to new kinds of statistics and statistical analysis.

3. A number of the explanations included psychology, just like Spousonomics. Is this because psychological terms and studies are better known (compared to disciplines like sociology) or because psychology truly does provide a lot of helpful information about sports situations? A lot of sports can be broken down into individual performances and efforts – see all of the recent psychoanalyzing of LeBron James – but they are also team games that require cooperation. Could we get more analysis of units or collectives?

4. There were particular chapters and insights that I found fascinating – here are a few:

4a. The overvaluing of round numbers, such as 20 home runs in a season or a .300 batting average, compared to hitters with 19 home runs and/or a .299 average. I don’t know if teams could really save a lot of money doing this but there is a fixation on certain figures.

4b. The trade value chart used around the NFL Draft and pioneered by the Dallas Cowboys needs to be revised.

4c. Two things about home field advantage. First, it is fairly consistent within sports across time and across countries. Second, officiating make up a decent amount of this advantage. I like the evidence of how baseball umpires suddenly started advantaging the road team on close calls when they knew that technology was being used to evaluate their calls.

4d. The chapter on the Cubs curse shows again that the idea is irrational.

5. In reading through this, I was reminded again of the wealth of statistics available in baseball. Other sports have to try to catch up to quantify as much as baseball can. But there is clearly a revolution underway with more professional teams taking these numbers seriously, including the new NBA champions. Could we get an analysis of whether teams that pay more attention to advanced statistics and analysis actually have better records? “Moneyball” was a big idea for a while as well but doesn’t seem to get as much attention now that Billy Beane isn’t competing as well out in Oakland.

5a. I’m sure someone has to have translated an undergraduate statistics course into an all-sports data format. How appealing would students find this and does this improve student learning outcomes?

Overall, I enjoyed this book: this should be of little surprise since it involves sports and statistics, two things that interest me. While some of the arguments may be familiar to sports fans, it does provide some more fodder for future sports conversations.

Study human flourishing rather than happiness

A well-known psychologist suggests we should study human flourishing rather than just happiness:

In theory, life satisfaction might include the various elements of well-being. But in practice, Dr. Seligman says, people’s answers to that question are largely — more than 70 percent — determined by how they’re feeling at the moment of the survey, not how they judge their lives over all.

“Life satisfaction essentially measures cheerful moods, so it is not entitled to a central place in any theory that aims to be more than a happiology,” he writes in “Flourish.” By that standard, he notes, a government could improve its numbers just by handing out the kind of euphoriant drugs that Aldous Huxley described in “Brave New World.”

So what should be measured instead? The best gauge so far of flourishing, Dr. Seligman says, comes from a study of 23 European countries by Felicia Huppert and Timothy So of the University of Cambridge. Besides asking respondents about their moods, the researchers asked about their relationships with others and their sense that they were accomplishing something worthwhile.

Denmark and Switzerland ranked highest in Europe, with more than a quarter of their citizens meeting the definition of flourishing. Near the bottom, with fewer than 10 percent flourishing, were France, Hungary, Portugal and Russia.

Studiers of happiness tend to ask about two areas: immediate happiness and longer-term happiness, typically referred to as “life satisfaction.” But Seligman is suggesting that these questions about satisfaction don’t really move beyond the immediate mood of the respondent. Additionally, the questions need to be adjusted to account for relationships and whether the respondent feels a sense of accomplishment in life.

It is interesting to see some of the cross-country comparisons. How might national or smaller cultures influence how individuals feel about life satisfaction? In the long run, do people actually have to be accomplishing something satisfying or is it more about perceptions? Can living a decent life in the American suburbs be ultimately satisfying for Americans or do they just think that it should be?

I wonder how these findings line up with earlier findings that religion leads to higher levels of life satisfaction.

(I also wonder if people think that the language of “flourishing” seems archaic or overly humanistic.)

The psychology and sociology of being a soldier

This piece discusses the psychological states of soldiers. A quick summary: studies after World War II found that most soldiers were not shooting to kill, training in subsequent decades effectively trained soldiers to kill, a recent study suggests that post-traumatic stress disorder (PTSD) rapidly increased among American soldiers, starting in Vietnam, but didn’t increase among British soldiers, and a new book argues that American soldiers have more PTSD simply because they were expected to.

Sounds like an interesting subject area: how are individual soldiers affected by training techniques that prepare them to kill? What seems most interesting here is the disparity in PTSD between British and American soldiers. It reminds me of a book I read years ago that suggests that ADD and ADHD diagnosis rates differed greatly between the United States and Britain. This finding was partly based on studies that had shown that the same kids who visited both American and British doctors were evaluated differently, suggesting that cultural differences might be behind the medical expertise. Has anyone done a similar study with the same British and American soldiers being evaluated by both British and American doctors?

While the interest here is in a psychological topic, this sounds more like a sociological question relating to cultural values and expectations.

A basic sociological take on The Smurfs

In a piece that could be a  Sociology 101 analysis, here is the conclusion regarding Smurf society:

The Smurfs society is unusually strong. Many times their status quo has been challenged, most notably with the introduction of Smurfette, with the community prevailing. The identity roles of each member of the society are well-defined which creates a symbiotic bond between each member and their chosen paths. In relation to humanity and childhood, this translates into cooperative theory and play. When a group of kids gets together on a “mission” they choose a leader (or usually the strongest personality volunteers him or herself) and from there roles are assigned.

Where other cartoons focused on individual efforts, The Smurfs focused on the society functioning as a whole, with individual roles each playing a part in the machine. This is a great example of a small society functioning effectively, even if they lived in mushrooms.

Just invoke the name of Durkheim and perhaps we have a functionalist analysis.

Before the start of the analysis, here is how the author describes sociology:

In Part One of the Psychology of cartoons, I focused more on the individual psychology of certain cartoon characters. This is something that I will return to, but for the purpose of this post I’m switching gears and instead focusing on a large scale (or small scale) sociological study. As you may or may not know — the implication is in its name — sociology is the study of society. It’s a very broad psychological discipline, and there are many conflicting theories surrounding any hypothesis. Since I have no degree in psychology or sociology, and I’m just a geek that likes to pretend I know what I’m talking about, this is going to be one of the broader studies performed.

This could use some work, particularly the bit about sociology being a “very broad psychological discipline.”