"I tell everyone I'm going to buy 15 SUV's" - Open Knowledge — LiveJournal
Sep. 7th, 2001
02:00 pm - "I tell everyone I'm going to buy 15 SUV's"
Matthew Rabin, an economist at Berkeley, won a MacAurthur "genius" award for his work on human irrationality. Here's an excerpt from a nice profile of him:
Rabin uses a simple example to illustrate one of the many consumer
habits that is left out of most economic profiles of buyer
preferences: people's strong desire for immediate gratification.
"If you ask someone if they'd rather have $10
now or $15 a week from now, a lot of the respondents would say they
wanted $10 now. If you then ask them if they'd rather have $10 50
weeks from now or $15 51 weeks from now, everyone will say they'd
rather have the $15 51 weeks from now," he says. "People have
self-control problems and they will cave in to immediate
gratification. But you don't find that psychological factor in the
economic models of our buying habits."