The way we perceive things is nonlinear, and there is an argument that instinctively we perceive quantity logarithmically. This is exemplified by the tendency of non-numerate people to put down three grains of rice when asked to make a pile halfway between one and nine grains. This perception of quantity may also be applied to price, as seen in Richard Thaler's experiment where people are more likely to go out of their way to save a small percentage on a cheaper item like a clock radio, compared to a more expensive item like a television, showing that the percentage of the saving is more important than the actual value of the saving.
In today’s episode, we continue our conversation with Rory Sutherland, UK Vice Chairman of Ogilvy, where he discusses how our decision making, especially as consumers, while often appearing irrational, is actually the result of us deploying heuristics that have served us well in situations of low trust or when we don't have all the information.
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This show is produced in collaboration with Wavelength Creative. Visit wavelengthcreative.com for more information.