Yardsticks

A: In line to buy $70 watch, friend tells you they have it for $40 two blocks away. Do you leave?

B: In line to buy $800 video camera, friend tells you they have it for $770 two blocks away. Do you leave?

Russo, Schoemaker, Decision Traps, 1989, pg 28

Previous slide

Next slide

Back to first slide

View graphic version

A second framing example has to do with the way we assess a cost/benefit analysis in the context of overall costs. You see here two choices. Now, since we are talking about this very explicitly it is unlikely that you’ll fall into the trap of not recogn