Behavioral economics

by Denver Dad

In a previous discussion, I talked about why I decided against joining a gym to play racquetball. The gist of it was that the cost was $28 a month, it’s a half-hour away, and I figured realistically I would go twice a month at most. So I decided not to join given the distance and the limited use (and some annoyance about the actual fee structure).

I thought this was a great example of behavioral economics. From a purely economic standpoint, $14 for a session of racquetball is pretty reasonable. When you compare it to some of the other things I spend money on, it’s actually pretty cheap. We go out to dinner a few times a month and that’s $75 or whatever each time, and I have no problem with that. When we go to the movies, it’s $40 for the four of us, not that we go that often. But from a psychological standpoint, the gym felt like too much money for some reason.

What are the things people don’t spend on even though they aren’t much money, and what are the things that you splurge on that probably don’t make economic sense?



by Denver Dad

In a previous discussion about cars, Lark said she is an over-researcher. So it got me thinking about the things I over-research. The big one is travel. I spend way too much time trying to get the best flight times, find the best places to stay in the perfect location for the best price, etc. I probably over-research other things as well, but not nearly to this extent.

So what are the things that you research to death? And what are the things that you research very little or not at all?