Yesterday, I dodged Black Friday, but didn't quite make it through Buy Nothing Day. I bought a streetcar ride and then a train ride down the peninsula. How much were those worth? I don't know. I know how much I paid for them, but I'm not really sure what they were worth. I wanted to walk around this strange patch of ground that I can see from the highway on my daily commute. How much was it worth to satisfy that curiosity? Uhm... That's a tough question. I'm bad at figuring out fair prices. Humans are bad at that. We're basically confused monkeys with the legal power to use credit cards.
By this point, I'm conditioned to pick up new books as William Poundstone writes them. So far, it's been a good instinct. Priceless gets into behavioral economics, specifically how we decide how much to pay for stuff. Back in the old days, you might have figured that out based upon what it cost to make something. But we've figured out that for some products, people are more willing to buy it if it costs more. And once you know that, you no longer have any idea of how much things should cost.
This book has good reports on experiments folks have done in this area. It does a good job of talking about interesting conclusions—and also warning you away from things you can't conclude from the studies. So I had a fun time reading up on variations on the Ultimatum Game, on anchoring (as the cognitive folks use the term), and stranger things. Fun stuff. Check it out.
