Re: The Availability Heuristic and Demand
In a message dated 6/25/03 2:35:11 PM, [EMAIL PROTECTED] writes: >I'm not a very good observer of human behavior, but isn't it at least possible > > >that in fact the opposite effect might prevail? Since these are 'free' >services > >which come out of tax dollars, won't some people be eager to 'get my share > > >back'? It might be like the person I talked to the other day who had to >have > >her car towed because she (embarrassingly) ran out of gas. "But at least," >she > >said, "I got back all my triple-A premiums for this year - and then some!" > > > >-- > >Susan Hogarth That's precisely how many people feel about Social Security. David Levenstam
Re: The Availability Heuristic and Demand
Quoting Eric Crampton <[EMAIL PROTECTED]>: > One of the recurring suggestions that comes up in the downward spiral of > Canadian medicare is that patients receive an itemized bill for service, > showing exactly how much each thing cost. They wouldn't have to pay the > bill, since it's all covered by the government, but the intuition behind > the proposal is similar -- people might be more frugal if they know what > things cost (even if they don't have to pay a dime directly). As far as I > know, that proposal hasn't gone anywhere yet though. I'm not a very good observer of human behavior, but isn't it at least possible that in fact the opposite effect might prevail? Since these are 'free' services which come out of tax dollars, won't some people be eager to 'get my share back'? It might be like the person I talked to the other day who had to have her car towed because she (embarrassingly) ran out of gas. "But at least," she said, "I got back all my triple-A premiums for this year - and then some!" -- Susan Hogarth "If we cannot adjust our differences peacefully we are less than human." - F. Herbert
Re: The Availability Heuristic and Demand
One of the recurring suggestions that comes up in the downward spiral of Canadian medicare is that patients receive an itemized bill for service, showing exactly how much each thing cost. They wouldn't have to pay the bill, since it's all covered by the government, but the intuition behind the proposal is similar -- people might be more frugal if they know what things cost (even if they don't have to pay a dime directly). As far as I know, that proposal hasn't gone anywhere yet though. Eric On Tue, 24 Jun 2003, Bryan Caplan wrote: > My wife was so swamped at work that I wound up paying our bills for the > first time in years. As I was writing the checks, I began to wonder: > After seeing the bills, would my consumption of e.g. utilities > systematically fall? It seems at least plausible that the act of paying > the bills makes you more likely to think about the expense of various > actions, and therefore more frugal. This bears more than a family > resemblance to the availability heuristic, where people estimate > probabilities using the ease of thinking of examples. > > RE tells us, of course, that paying the bills and becoming more > price-conscious should have no systematic effect on consumption. Some > prices will be higher than you thought, some lower. The contrary > theory, though, is that we implicitly think of a lot of things as free, > unless direct experience reminds us of the opposite. > -- > Prof. Bryan Caplan > Department of Economics George Mason University > http://www.bcaplan.com [EMAIL PROTECTED] > > "Infancy conforms to nobody: all conform to it, so that > one babe commonly makes four or five out of the adults > who prattle and play to it." > > --Ralph Waldo Emerson, "Self-Reliance" > > > >
