Horace Ho
Ms. Navarro
Psych 11 Period 3
March 24th, 2021
One Page Poster Writing Source & Information
Predictably Irrational - The Cost of Zero Cost; Why We Often Pay Too Much When We
Pay Nothing
1. brief summary of what the book or article is about.
This book included lots of ideas and topics about the behavioral economy. One of my favorite
parts is The Cost of Zero Cost. Author’s main point in this section is that people like to have
free things, even those things are useless and we don’t need them at all. Free products make
people lose their minds, and affect people to produce additional consumption. Free products
give us an illusion that we believe that the value of free items is much higher than its actual
value.
2. evaluation of the authority of author
Dan Ariely is the author of this book. In 2008 Ariely returned to Duke University as James B.
Duke Professor of Psychology and Behavioral Economics. Ariely's TED talks have been
viewed over 15 million times. Ariely is the author of the three New York Times best sellers
Predictably Irrational, The Upside of Irrationality , and The Honest Truth about Dishonesty, as
well as the books Dollars and Sense. In 2018 Ariely was named one of the 50 most influential
living psychologists in the world.
3. explanation of how this helps you understand your topic.
Behavioral Economy is a really big topic that concerns the psychological, emotional, cultural
effect of economic decisions. Behavioral models typically integrate insights from psychology,
neuroscience and microeconomic theory. The study of behavioral economics includes how
market decisions are made and the mechanisms that drive public choice. The 0-price effect is a
really important idea nowadays, which will affect human’s minds in decision making.
4. Citation in MLA format
Ariely, Dan. Predictably Irrational : The Hidden Forces That Shape Our Decisions. New York,
Harper Perennial, 2010.
Why are we so willing to queue up for free things that are already cheap to begin with?
1. brief summary of what the book or article is about.
One example, hundreds of New Yorkers are participating in the time-honored ritual of waiting
for hours in the cold to eat free IHOP pancakes. People are more likely to choose the 0-cost
product rather than to pay for the product, although the product is really cheap and useless.
Most people thought that the extra satisfaction knowing you don’t have to dole out anything to
get what you would like. Dan Ariely offers an idea from the perspective of behavioral
economics. FREE! gives us such an emotional charge that we perceive what is being offered as
immensely more valuable than it really is.
2. evaluation of the authority of author
Jessica Leigh Hester is a writer, editor and audio producer about science, social science and
economy. She already posted some news articles and wrote for the web and the print
magazine. Her journalistic work has also appeared in the New Yorker, New York Times, NPR,
BBC, the Pacific Standard and Village Voice, and has been cited by the Washington Post,
TIME, Smithsonian Magazine, Vox, and other outlets.
She used a really fair tone to explain the 0 price effect in the real society although she is not
the famous authority in the behavioral economy field.
3. explanation of how this helps you understand your topic.
This research article is another one example to prove the 0 cost effect. Even though everyone
knows the product's actual value is really cheap, people still want to get these products,
because it is free. New York People spent 2 to 3 hours waiting for a dollar cost donut, only
because it is free. Which proved the 0 cost effect is really strong and affects people’s mind.
4. Citation in MLA format
Hester, Jessica Leigh. “Why Are We so Willing to Queue up for Free Things That Are Already
Cheap to Begin With?” [Link], Bloomberg CityLab, 5 June 2015,
[Link]/news/articles/2015-06-05/we-love-free-stuff-even-when-it-doesn-t-
make-economic-sense.
How Small is Zero Price? The True Value of Free Products
1. brief summary of what the book or article is about.
Authors derive a new behavioral experiment to explain why zero price is more affinity for
humans to get instead of spending money to buy cheap stuff. Authors stated that there are two
types of chocolate with different values. When less attractive chocolate became zero price, the
more people would switch their mind and you can imagine that the more attractive chocolate
before zero price, would become less consumed by comparison with zero-price. As a cost-free
item, people will think that they can get what they want without paying, which will make
people interested.
2. evaluation of the authority of author
Ariely, Dan: the first person starts to think about why zero price changes human’s behavior.
His theory and paper have already been published to several greatest journals and some of the
cases are used in his own book.
Kristina Shampaner: Ariely’s assistant who is another observer in the case study.
Both paper works are developed by these two men and their models are used in our society
now.
3. explanation of how this helps you understand your topic.
The example provides an economic phenomenon in which people are usually affected by their
emotions which sometimes are not reasonable, but they all think that their behavior is correct
at all. It seems that the merchant has changed the price of chocolate to 0, but by a means, the
merchant can get more profits. Isn't this a good thing? The behavioral economics are very
complicated, so based on this information (in this paper), I will have more evidence to explain
this situation even that the author for three articles is the same.
4. Citation in MLA format
Shampanier, Kristina, et al. “Zero as a Special Price: The True Value of Free Products.”
Marketing Science, vol. 26, no. 6, Nov. 2007, pp. 742–757, 10.1287/mksc.1060.0254.
