The Taboo Tradeoff

Readers, today's post is a follow-up to last week’s contentious* article on how the consumer products industry sells us high-priced aspirational goods--when they actually make us negligibly more safe. Today we'll explore another example of how the consumer products industry benefits from our irrationality.

There was an alternate version of last week's safer insecticide survey asking parents to imagine two additional types of the product for their children:

1) The regular insecticide where the risk of inhalation and child poisoning was 15 per 10,000 bottles.

2) A less expensive insecticide where the risk rose from 15 per 10,000 to 16 per 10,000.

The survey asked parents how much of a discount would induce them to switch to the less expensive product. Shockingly, two thirds of the parents said they wouldn't purchase the less expensive product... at any price!

Now, on one hand, this is really just a reframing of the consumer choice question from last week. This time, however, the choice is framed as a comparison between a "regular" product with a very small risk and a "discount" product that's technically more dangerous, but negligibly so.

Any consumer capable of sixth grade math will see that the incremental danger of choice #2 is so tiny as to be utterly meaningless. Further, if our personal safety has any quantifiable value at all, there must be some discount that would make the second product worth it to us.

Except that the discounted product is never worth it to us, no matter how much cheaper it is. Why? This is the part that's heavy: Because it "feels" like you're subjecting your child to more risk... just to save a little extra money. In fact, the greater the price discount, the stingier and more terrible you feel!

It's like going to a discount heart surgeon. Nobody goes to a discount heart surgeon.

Psychologists call this the taboo tradeoff. And people respond to taboo tradeoffs in an irrational and deeply emotional way. Yet again, we struggle to think clearly or logically about both the economics and the incremental degree of safety, and we view our feelings of safety to be far more important than the actual quantifiable increment of safety. It's difficult to explain exactly why this happens, but Daniel Kahneman offers a theory that fear of regret motivates the decision:

"The what-if? thought that occurs to any parent who deliberately makes such a trade is an image of the regret and shame he or she would feel in the event the insecticide caused harm."

Okay. So if consumer products companies can create products evoking aspirational feelings, taboo tradeoffs--even anticipatory regret and shame--don't you think it would be child's play for them to use these feelings to get us to pay more? A lot more?

Think through this. Are you getting real value for the high-priced "safer" products you buy, or are these products merely preying on your fears and your need for identity construction? How would an empowered consumer think about this? Readers, what do you think?

Once again, I’m grateful to Daniel Kahneman's book Thinking, Fast and Slow for helping me think though these psychological issues and apply them to the theme of consumer empowerment.

* Finally, speaking of contentiousness, here's a link to an, uh, interesting twitter exchange with a reader who missed my point entirely and tried to shame me for being "gleeful at the expense of human suffering." Nice, right?

Read Next: Consumers: Pay For Your Own Brainwashing! (Or Don't)

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Anonymous said...

In this and the prior post, you seem to be misusing the term "aspirational" which does not mean merely "silly and expensive," but rather purchased or desired for establishing relative social status.

Your article also misses is the role of food safety agencies. 15 poisonings per 10,000 people? That's about 1/600 or one kid per middle school -- poisoned!! Hardly a remote risk and definitely a product that should be banned. I would buy neither at any price, if -- and here is the real catch -- I could find out about the poisoning statistics.

Daniel said...

And yet life is filled with various risks, many of which are unknown, unknowable, unquantifiable... even by the people who are supposed to know what "should be banned" on our behalf.

Nobody here is poisoning children. This and the prior post are simply examples to illustrate a point about getting actual *incremental* safety rather than a feeeeeling of safety for any extra you pay as a consumer.

The central point here is that empowered consumers--at least those who don't wish to be pointlessly separated from their money--want to understand if they are needlessly overpaying for a negligible or zero reduction in risk.

Finally, I have no idea where you think I defined aspirational as "silly and expensive." On the contrary, I entirely agree with your definition of the term.


Anonymous said...

I agree with the previous poster. Neither product is acceptable. With these exercises you are trying to excuse Monsanto from guilt for inflicting our children with what you are qualifying as acceptable risks.

Daniel said...

Anon #2: That's the very first time I've ever been called an apologist for Monsanto. Nice. You must be new here.

PS: Excellent straw man argument too, well done.


chacha1 said...

I think the responsible parent who is also a socially conscious consumer would A) buy the cheaper product B) use as little of it as possible - all insecticides are poisons, and poisons do not disappear when the bugs do C) store it in a locked cabinet well out of the reach of children.

There are a lot of people out there spending a lot of money on "safer" products that will still kill their kids if their kids can get into them. Locks. A good idea.