Are you trying to make smarter shopping decisions? Neuroscientists and economists dive deep into the psychology behind consumerism and why we make poor shopping choices.
Humans don’t always make the smartest decisions when it comes to the stuff we buy. Time pressure can explain some of this – we grab the first thing we see on the shelf without checking the price and head to the cashier.
Grocery stores charge brands more to place items at the average consumer’s eye height on shelves for this reason. But research shows that even when we aren’t pressed for time, we don’t always make the right decisions when it comes to price points. Figuring out why is a question preoccupying many economists, neuroscientists, and psychologists.
A recent study, published in the journal Review of Behavioral Economics, has offered a new model to rationalize why poor decisions are made. This “ratio-difference” theory explains that humans sometimes compare prices and savings to each other in relative terms when they should be thinking in absolute terms.
