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The sneezing, sniffling, achy, head fever so you can rest easier with your decision
There I am, again. Staring at the cold medicines at the drug store.
I can pay $12 bucks for NyQuil™. The generic is $5.99.
After 10 minutes of reading labels, shifting boxes and bottles around, re-reading labels and second and third guessing myself, I reach for the NyQuil. For good measure I also grab the $11 nighttime version (generic $6.99). A girl's got to sleep, right?
Here is the conundrum: I know that the branded medicine and the generic are the same thing. I re-read the label about 6 times every cold season. But I always buy the expensive one. There is something scary and risky about buying the cheaper cold cure... I'm just not confident it will work as well. Even though I understand rationally that the two medicines are identical.
Rationality Ready. Rationality Capable?
Careening down that irrational path, it is comforting to note that... I'm not alone.
Waber, Shiy, Carmon and Arely (2008) report a study showing that participants perceived that full-priced pain relievers work better than the same pills offered at a discount.
In this study, participants were recruited under the guise of testing a new pain relieving drug under investigation by the FDA.
In order to test the effectiveness of the 'new drug,' participants took it and then were given increasingly intense electric shocks. After each shock, they would report how much pain they experienced on a scale ranging from "no pain at all" to "the worst pain imaginable."
To determine whether cost influenced perceived effectiveness, half of the participants were told that the drug would cost $2.50 / pill. The other half of the participants were told that it had been discounted to 10 cents / pill.
Participants who believed that the drug cost $2.50 / pill reported that it worked significantly better than those that thought it cost only 10 cents / pill.
The best part of the whole study? The pills were placebos.
Users are Rationality Capable. But are they Rationality Ready?
There are two points to be taken from consumers' willingness to pay more for cold meds:
- The difference is merely perceived.
- The mere perception is absolutely real.
References
Waber, Shiy, Carmon and Arely (2008). Commercial Features of Placebo and Therapeutic Efficacy. The Journal of the American Medical Association, 299 (9), 1016-1017.
Message from the CEO, Dr. Eric Schaffer — The Pragmatic Ergonomist
Getting at why people make the decisions they do is not always obvious. And figuring it out is no longer just about watching what people do. You also have to figure out what drives users, and what beliefs or situations may get in the way of making the decisions that your organization wants them to make.
Usability hasn't defined enough effective methods for doing this. And despite what people may think, neither has marketing. Look to hear more from us about this. We're working on it...
Leave a comment here
Reader comments
Leo Hartman
Canadian Space Administration
What if you gave some of the people the placebo and told them they were part of a control group and would get a placebo? Maybe there should be a real control group that gets no drug or information (yeah, we just abduct them and apply the electric shocks! :-)
Are there any studies to indicate how long this effect (perception based discrepancy with reality) will last? People repeatedly buy the expensive cold remedy but what about in a long term, continuous usage situation. I suppose as always, some do, some don't.
What might be the evolutionary value of this kind of behavior? Do we have this phenomenon to thank for things like courage, honor, morality, religion, political parties, ...?
Diane Albert
I love to apply these articles to the strategies of my side business outside the software world. I am a professional musician. My colleagues and I always hear comments about how expensive it is to hire music groups for events. I could charge a lower rate and I would still be as good. There will always be people who can not afford what I charge no matter how low it is.
In some cases, the packaging is the only thing that is different, but that can be enough to sway my purchase decisions.
Interesting article as always!
Don Demrow
Citi
Like the old saying goes: "Perception is reality."
Bonni Dennison
TD Canada Trust
Amusing and enlightening...thanks for sharing!
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