I forget what it's called and my Google-Fu isn't working.
This is how it works.
Case #1: Let's say you're going to buy some gadget. It's $50 at store A. You realize, however, that Store B sells it for $25. So, it's a no-brainer. Why buy it for $50 when you can buy it for $25, even of it means driving to Store B. After all, it's also 50% off.
Case #2: You see a gadget in Store A for $800. You discover that you can buy the same item at Store B for $775. Believe it or not, most people would NOT drive to Store B, unlike in Case #1.
The cognitive "error" comes because people look at the savings relative to the price of the item, rather than the absolute real value of the savings.
There is a name for this, and I forget what it's called. It's something I keep in mind for large purchases. In fact, I ran across it just now...
I discovered that the microwave that I was buying from Amazon was about $30 cheaper buying direct from Panasonic. Amazon wouldn't match the price, free shipping in both cases. So, no brainer...
January 11, 2017 at 12:32PM
