Hacker News Re-Imagined

Free stuff makes us irrational

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  • 11 days ago

  • @yarapavan
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Free stuff makes us irrational


@carvking 10 days

Replying to @yarapavan 🎙

Didn't read the whole article - but I'll just write this anyway.

For prices this low - it's not about the price - it's about the hassle of paying.

I'd probably buy much more unneeded stuff if I was walking past a stand of products on the street and could just take what I wanted and it would magically get paid for by me without any need of interaction.

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@shrimp_emoji 10 days

Replying to @yarapavan 🎙

>Free physical goods in meatspace

Those are made with materials, they're consumed, and they're worn/gone.

>Free digital goods in cyberspace

We've entered a different world. Our old model breaks down. Here, things are copied, pasted, transmitted, and stored for negligible cost. When they're consumed, they remain. For software, there's an extra dimension of totalitarianism: a burger in meatspace (for now) doesn't scan your saliva and send the data back to the restaurant or receive an OTA update and transform into a hotdog mid-chew or dictate how and when you eat it. Here, the economic dynamics and tyrannies of meatspace (scarcity, wear-and-tear, cost of materials) can only be implemented with hacks (DRM, perpetual renting, etc., none of which ultimately work to fully simulate meatspace's mechanics of "when you eat a burger, you can't eat it again").

Free digital content has downsides, sure, but good luck making it not free. In cyberspace, it's information, and information wants to be free.

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@thriftwy 10 days

Replying to @yarapavan 🎙

Authors seem to have misconceptions about how people work:

...participants were asked to choose one of the following:

A free Hershey’s Kiss

A $0.13 Lindt truffle (a superior product in quality that retails for multiples more than a Hershey’s Kiss)

Well obviously, I'm getting a free thing as a no-brainer, and then I also decide whether I want the paid thing or not.

They seem to be oblivious to transaction costs. What if they offered free candy after the e-mail confirmation, but the paid truffle no strings attached?

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@giulio 9 days

Replying to @yarapavan 🎙

I was an early internet evangelist 30+ years ago but now I miss the old newspapers. If you have to PAY for what you read you are far more discriminating. Concerning “free” (there’s no such thing you know) services like gmail, Twitter, Facebook, Instagram etc., I’m persuaded that a small reasonable fee would eliminate 99+ percent of spambots and trolls.

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@hackily 10 days

Replying to @yarapavan 🎙

It's interesting to note that the effect of some good being free holds its power if we know that the good is not usually free.

It would be interesting if the article had more research on what the emotions of users when they come across a paywall. For example, I get irrationally upset when I see a paywall, even though I logically know that content writers deserve to be paid.

The fact that less than 20% of Americans will pay for news almost certainly makes the subscriptions more expensive for the percentage of users who will actually pay. Does the price affect how upset someone gets? I know for me, I don't even look at the price, I never intended on paying since I've been conditioned to expect articles to be free.

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@sys_64738 9 days

Replying to @yarapavan 🎙

Try giving away free stuff on Craigslist. The litany of contacts from people is mind blowing. Some are "Can you hold it for me?" and "Can you deliver it to me for free?"

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@musicale 9 days

Replying to @yarapavan 🎙

> In 2007, he co-authored a study titled “Zero as a Special Price: The True Value of Free Products” in which participants were asked to choose one of the following: > - A free Hershey’s Kiss

I would never take the Hershey's Kiss because of the foul vomity taste/smell.

I can't eat regular Hershey chocolate unless it's mixed with something else to mask the smell and acidity.

I would happily take 10 Lindt truffles for $1.30. Though I really just like the various bars.

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@guidoism 9 days

Replying to @yarapavan 🎙

This is exactly what I noticed when getting rid of stuff on my company’s “for-sale” mailing list. It doesn’t matter what it was, there was a HUGE difference in responses between $0.01 and free. It could have been a brand new in the box $50 item and if I asked for $0.01 for it the responses would be like: “Hmm, I don’t know. Can you throw something else in to make the deal better for me”. But say it was free? Man, I would get like a hundred responses within a minute.

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@TrackerFF 10 days

Replying to @yarapavan 🎙

Back in college, I used to sell niche stuff to make some extra money. Did that for some years after college too - as I had built up a pretty decent number of customers.

Free shipping from larger companies started to change the mentality of many buyers. It was now expected that you too could / should offer free shipping, while maintaining low prices. Of course, small sellers like me don't have the economy of scale to offer such things, without jacking the price considerably.

My second observation was that dealing with the "free" demographics was such a hassle, it is almost never worth it. People that are bargain hunters tend to be more demanding, and for some reason have higher expectations. The only disputes I EVER had, were with those kind of buyers - on extremely cheap items (think under $5). I even got into disputes with people over freebies - i.e. I sent them some free stuff, and they didn't like those.

So on quitting this all together, I figured out that if you're gonna be a small-volume seller, you're better off focusing on the premium / quality segment. It's extremely difficult to compete against amazon on price and shipping.

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@mrfusion 9 days

Replying to @yarapavan 🎙

I tried to sell a cheap manual treadmill a few years ago. I kept lowering the price with no interest.

Finally I set it to free and my Neightbor scooped it up instantly.

The crazy thing is he was so excited about it and got so much use out of it,

I always wondered why didn’t he just buy it for $10.

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@WalterBright 10 days

Replying to @yarapavan 🎙

> when people see something for free, they don’t see the downside

Which explains why politicians are always promising a free lunch.

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@andybak 9 days

Replying to @yarapavan 🎙

There's a nuance here about the definition of "irrational".

"Rational" often describes higher-level decision making. Here it is used to in reference simply to outcomes.

If my underlying emotional circuitry rewards me with more units of pleasure for doing x and "experiencing pleasure" is a core motivation then it's a rational decision to do x.

Now - the outcome might be "irrational" when viewed as a whole but it doesn't make sense that way unless there's another external goal. Eating chocolates doesn't have any goal other than pleasure so the Lindt/Hersheys example is rational either way.

It's quite common to use these kind of analyses to imply people are stupid or irrational or both in terms of many kinds of choices but it doesn't hold water unless you own up to the implied external goal you are covertly slipping in to the discussion.

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@hericium 10 days

Replying to @yarapavan 🎙

People are brainwashed to use their privacy as a currency for "free" stuff.

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@Simon_O_Rourke 10 days

Replying to @yarapavan 🎙

Absolutely free things make people behave irrationally! Given the right prompting a free t-shirt and a "50% off your next coffee" voucher would be sufficient to hire an international team of assassins.

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@Panzer04 10 days

Replying to @yarapavan 🎙

I wonder how much of this effect comes down to 0 effort, rather than the actual cost - If I'm stopped to sample a chocolate, the free one doesn't require me to take out my wallet or find change. As soon as both cost money, the 13c example is such a minimal amount more expensive I'd be way more open to trying it out.

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@csydas 10 days

Replying to @yarapavan 🎙

Just my experience, but I think it's that Free engages a senses of entitlement because in many people's minds, Free means it's rightfully theirs and that any action that inhibits their ability to get what is theirs is an offense of a high degree.

While I don't work with any of our branding team/activities much, our generalist support team was moved under my purview and all issues related to giveaways or brand events come through the support team (their main duties are related to stuff like account management, issues with the public site, licensing management, etc).

The absolutely awful statements and behaviors from persons who didn't get stuff like a free T-Shirt for participating in an event is astounding, and it's a truly global phenomenon, as users from probably 30+ countries have needed management level intervention to tell them basically "knock that shit off you're an adult and this is about a T-Shirt" fairly frequently. They are very openly offensive towards my generalist staff when the staff try to explain stuff like "the distributor is based in N country, moving it to Y country is still heavily delayed due to the world situation right now" (e.g., COVID, war, etc).

But the common response is "I don't care, this is _MY_ t-shirt and you owe it to me", and they spam and harass multiple times a week for weeks on end. It's really difficult to deal with because I've not been clever enough to figure out how to appeal to any sense of patience and most of the times just issue an ultimatum email of "Stop spamming or I'll cancel the order entirely." This is after they're given items like tracking numbers so they themselves can see that the stuff is just caught up in the system or being told that we are waiting for the next batch of swag to be branded and shipped to us.

Overwhelmingly though, the idea presented is that "It's mine, I'm _legally_ entitled to it, you are doing something illegal by not giving it to me right now", and so far I've not been able to come up with a way that shakes this mentality and stops the abhorrent behavior. (Truly, some of the things they say are absolutely outrageous and offensive towards my generalist staff)

With our free product, we get a lot of the same behavior too, but at least this one I understand because it's either:

1. Company found out our free edition works great for their setup so no need to buy a paid license, but since free has no support guarantee, if there is an issue they're out of luck unless we happen to have spare bandwidth on the Support side, which since COVID began has been rare. (I'm 200% for don't pay if you don't need to and I'm glad the product is so good the limited free edition works for them! I don't want to sell anything cause I'm not a sales person)

2. Small MSPs/Providers get pissed when they sell the Free edition (against our EULA very explicitly) and then realize that if something happens in their client environment, we won't support it

For these cases at least the motivation feels a bit stronger to me. (one is just feeling trapped without support, the latter is having to face the reality they're breaking EULA and they built their business on a not-legal premise and might have to admit to their clients they've been charging them for a free product) I absolutely get _where_ the frustration comes from and where the entitlement is based on since there's a bit more at stake. But compared to "where's my sticker collection you promised!?", I even feel sympathy towards the free-edition users because probably it is pretty stressful and scary.

Ultimately Free does give a sense of entitlement; people think they should get exactly what they imagine in their mind and by that point it's not something they might get, it's their property that you're denying. It's honestly extremely depressing to deal with such issues and explain to persons with tons of accolades and technical acumen that "you can't treat people like shit just because you didn't get a T-Shirt" and that it really isn't theirs until its in their hands.

Addendum edit: The less said about Twitter/reddit facilitating such complaints the better. Absolutely awful media, and while sometimes there are some voices of reason in the mob, the majority bandwagon and just exacerbate the issue, which gets the social media team in a tizzy as they also aren't equipped to explain such situations or crowd-control the threads.

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@daenz 10 days

Replying to @yarapavan 🎙

I've been running a free closed beta for a product of mine for... 6 months. The users absolutely love it and claim they can't live without it. But I am having difficulty wrangling them into a price that they don't complain about. I think I'm bumping up against these "free" forces somehow. I also think the closed beta has run too long, and now they're spoiled.

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@drewcoo 9 days

Replying to @yarapavan 🎙

This seems like a completely backward explanation to me. (But entirely in keeping with the biases of The Hustle, based on their headlines.)

Markets for everything and everything for a price - those things are probably driving the irrational behavior.

We just don't see that pressure because we're in that system. We're acclimated.

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@more_corn 10 days

Replying to @yarapavan 🎙

There’s also a downside of free. Anyone who has posted on Craigslist free knows. You almost always want to put an absurdly low price on it not free. That screens the “free tattoo at a party” people out. You don’t need that behavior in your day.

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@donatj 10 days

Replying to @yarapavan 🎙

Before I lived with my then girlfriend now wife, I used to go to a pretty large number of meetups each month largely for the free food. I made decent money, was terrible at social interaction and enjoyed very few of the meetups, but free food? Come on, lol.

It’s really a weirdly effective motivator, at least for me.

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@dghughes 9 days

Replying to @yarapavan 🎙

I worked at a small casino that was owned by the "state lottery" (it was in Canada and operated by the federal government but via partner provinces).

An old lottery name was changed from Super 7 to Lottomax and old promotional supplies had to be trashed. There were piles of cheap thin pens that had big 7 as part of the pen at the top.

We casually gave them out at the casino but them it happened. People freaked out and wanted a dozen. "Can I get two more for my grandchildren" and "Can we have more than one!". It was nuts.

That jogged my memory I recall now we also had free pens at the player's counter where people could sign up for a loyalty card. So it wasn't like free pens were unusual. Maybe the loyalty program registered as a cost in people's minds.

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@amelius 9 days

Replying to @yarapavan 🎙

Free stuff makes me suspicious.

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@topher515 10 days

Replying to @yarapavan 🎙

So if we take for granted that humans really, actually do seem to like free stuff more than we “should”, then perhaps instead of reacting with “lol, humans irrational”, we should more thoughtfully consider why evolutionary pressures would sculpt a mind that seeks out a “free lunch” over a cheap lunch.

Or, to rephrase, if free-seeking is such a powerful effect, then evolution must’ve intended our brains to work this way. Thus suggesting that, while the effect creates individual decisions that are economically irrational, over the long term it must be a survival benefit.

There’s a lot of ways this could work (and I’m eager to hear HNers speculate) but one that springs to mind is thinking in terms of risk as cost.

Imagine you must choose getting great fruit by climbing a slightly unsafe tree, or eating mediocre fruit on the ground in front of you. Over the long term evolution should favor the creature that eats the no-risk ground fruit over even the very low risk climb. Taking ZERO unnecessary risk would be favored, because even the tiniest risks are survival filters over evolutionary time scales.

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@mpitt 10 days

Replying to @yarapavan 🎙

Big "one study says" energy in most of the points here. I also think it would be more honest to write the percentage of people who chose neither of the chocolates in the same size as the other numbers.

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@scollet 10 days

Replying to @yarapavan 🎙

Can we get a venn diagram of people who write for thehustle and people who regularly snort cocaine?

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@AussieWog93 10 days

Replying to @yarapavan 🎙

Interesting they mentioned the stat that only 20% of people actually pay for news.

I looked at newspaper circulation data from the 00s in Melbourne[1], and it seems the same was true back then. Looking at 2005, for example, The Herald Sun and The Age (which for all intents and purposes were 100% of the newspaper market) sold a combined 700k issues each weekday, out of a population of 3.5m.

Perhaps the phenomenon here is more about 80% of people getting their news through friends, family, co-workers and other social connections rather than subscribing to a professionally edited news source.

[1] https://en.wikipedia.org/wiki/List_of_newspapers_in_Australi...

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@manc_lad 10 days

Replying to @yarapavan 🎙

I worked for a multinational finance company. in the summer, they would give out free ice lollies. Despite being about 0.70p each, the rush and frenzy was too much. They stopped the I've lollies to the disappointment of the rational employees.

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@asiachick 10 days

Replying to @yarapavan 🎙

I think it depends on what we're talking about ..... I used to collect free stuff at conferences. I loved getting a bag at the entrance to some conference, GDC, E3, CES, Auto Show, etc. It would be full of fliers and free magazines. Then I'd go around the booths collecting free pens, free buttons, free t-shirts, free stickers, more free magazines, fliers, etc....

At some point I realized all of that was actually not something I wanted. I didn't need branded pens. I was not going to actually wear the t-shirts. I likely didn't have time or care about the magazines.

It switched to collecting nothing. At most if I see something I think I'm interested in instead of taking a flier I'll take a picture and look it up later. I don't take any free swag. There might be some exception but it would have to be pretty exceptional. I might initially feel a desire for the free stuff but then I think "Am I really going to use/wear/look at this?" The answer is pretty much always "no" so I leave it.

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@pessimizer 10 days

Replying to @yarapavan 🎙

I should have quit when I saw they thought two examples of fistfights years apart were any evidence for their case, but I persisted.

Science around rational choices often tends to be premised by bizarre theories about what is obviously rational. People take free stuff because it often costs them nothing if it turns out to be a mistake. I can throw a free piece of chocolate in the trash if I don't like it. Throwing a 13¢ piece of chocolate away is like throwing away 13¢. This fake effect would disappear if you were given the choice between a free thing with no resale value and a cheap thing with high resale value, because the cheap thing now becomes profitable to throw away (or in this case sell.)

Also, the specifics about chocolate: I've never had a Lindt chocolate, I've had a Hershey's Kiss (they outsell Lindt in the US by multiple orders of magnitude.) I have no idea whether they're more expensive because they're better, or even because they're more expensive to manufacture or the chocolate is of higher quality grade - they could be more expensive because of the packaging. The fancy thing is often worse ("for a more refined palate") than the cheap thing. The Lindt is a risk that the Hershey's is not.

I'm going to skip free shipping, because, again, out of context it's difficult to evaluate the current value of products one hasn't bought recently. It's far easier to evaluate shipping costs. Also, shipping costs swamp other considerations when buying small, inexpensive things, which are most people's purchases. Also, this is a dumb survey ranking public concerns, and as always being used as a proxy for importance. [edit: just looked closer at the list of concerns they ranked free shipping above. They're all objectively worth less than free shipping to someone not in a hurry.]

The last (and the goal of the article) is the goofy attempt to transfer this badly argued effect to the consumption of online news. I read tons of online news that is awful, and is written by people who are bad, financed by other people who are bad. I wish I could take money away from them. I might be reading it to see what bad people are thinking, or I might even be reading it because I was suckered in by a deceptive or vague headline. While I want to know what bad people are thinking, I don't want to pay them for the privilege. Linkbait headlines steal my time and energy, and I not only don't want to pay them, I wish I could fine them.

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@fennecfoxy 9 days

Replying to @yarapavan 🎙

Yup, even for Google related service. Look at people who scream bloody murder: * When Youtube charges for a premium service to remove ads * At the of having to pay for gmail * Paying for any other of Google's free services (translate, lens, etc).

Even just for lens, imagine telling someone in the 90s that we'd get a free app that lets you take a picture, whooshes it off to some server and uses AI to tell you "what that thing is" along with providing instant access to Google's knowledge related to that "thing". For free!

People are so self-entitled. Yes, companies sometimes make bad decisions around free products, but for many of Google's offerings (and other free service from other companies) _they're the only ones offering it, it wouldn't exist otherwise_

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