Consumers Behave Stupidly When Things Are "Free"

“Free” has a magic effect on people’s minds, according to research by Dan Ariely (whose new book, Predictably Irrational could become the Freakonomics of 2008). He did an experiment giving people a choice between a “high-value” and a “low-value” product, a Lindt’s chocolate and a Hershey’s, respectively, and nothing. When the price was set at 1 cent for the Hershey’s and 15 cents for the Lindts, 14% chose the Hershey’s and 36% chose the Lindt’s. What do you think happened when the price was reduced by one cent for both items?

Human beings are rational creatures who subtract costs from benefits to make decisions, traditional behavioral economics tells us, and you would think that the demand for both items would increase by the same factor. After all, the cost for each was reduced by the same amount. But Ariley found something quite different. When the Hershey’s were FREE and the Lindts were 14 cents, 42% chose Hersheys and 19% chose Lindts. Airley explains, saying, “when people are faced with a choice between two products, one of which is free, they overreact to the free product as if zero price meant not only a low cost of buying the product, but also its increased valuation.”

Something to think about the next time you’re deciding between getting the car with three years of free oil changes and the one with $1,000 cashback.

Kristina Shampanier, Nina Mazar and Dan Ariely (2007) “Zero as a Special Price: The True Value of Free Products“. Marketing Science. Vol. 26, No. 6, 742 – 757. (PDF)

(Photo: Maulleigh)

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  1. Buran says:

    Maybe they just don’t like the low-quality stuff Hersheys calls “chocolate”?

  2. gmanj says:

    First off, drawing grand conclusions based on an experiment using chocolate bars is silly.

    Second off in this example, maybe the test cases are smarter than they think. It’s not just about 1 cent vs 0 cents. It’s also about the ability to now get an infinite number of a product for no cost. Maybe the human mind subconsciously processes that cool fact.

  3. crabbyman6 says:

    @Buran: O.o
    IMO I’d rather pay for Hersheys than get free Lindt.

  4. andrewe says:

    @Buran:

    Try the Canadian version. Hershey’s is a premium chocolate up here.

  5. tequilajunction says:

    The fundamental flaw in this arguement is that they assume people think in terms of absolute discounts (1 cent) instead of percentage discounts (6.6% vs 100%).

    If you take their data and assume that people think in terms of percentage, then the conclusion is that people UNDERVALUE free products.

    Which is why a research report is only as good as its assumptions.

  6. KristinaBeana says:

    My part-time job is selling women’s fragrances and we often have customers that shop based entirely on the “free” gift. I have been in the business for years and I am still amazed by the search for a free bag or some 1 ounce lotions as the overriding decision maker. These items are not free at all, since the brands that are known for gifts are also the brands that raise their prices every season – Ralph Lauren, I am looking at you.

  7. starrion says:

    Hershey’s is a premium chocolate only in comparison to Palmer’s.

    Palmer’s should be considered congealed floor wax

  8. opfreak says:

    This study just doesnt feel right. It doesn’t compare quite right to the car example ethier, because their you are buying something and picking between oil changes or 1000 dollars.

    in the study, the choice was between paying for the candy, or getting it for free. Why would you not take the freebie, if there is no catch? How is that stupid, in one case you have some one picking to pay for 2 different items. In the other you ethier pay, or just get.

  9. missdona says:

    People get crazy over free stuff. I didn’t think we need a study to figure that out. I was at a trade show and people were going ape-shit over free ugly t-shirts. It didn’t matter the size or color, if it was free, there was a crowd.

  10. UpsetPanda says:

    Mmm…chocolate. Chocolate (that isn’t hersheys) is so expensive now that when I need a grocery store chocolate fix, I pick the cheapest kind that isn’t hershey’s. I don’t like solid hershey’s chocolate. It tastes waxy to me..chocolate should be smooth. And I love dark chocolate, and Hershey’s only makes the gigantic dark chocolate bars, and I can get better quality dark chocolate for the better price.

  11. hc5duke says:

    After all, the cost for each was reduced by the same amount.

    It’s not so much that both prices were reduced by 1 cent — one product was marked down 7%, while the other was marked down 100%. Is that really that hard to grasp?

  12. EBounding says:

    Seeing as they could only take one piece, that is irrational. But if they could take as much as they want, people are of course going to take something that is no cost to them. Maybe they didn’t want to have to deal with making change for a 1 cent candy before it was free?

  13. gmanj says:

    @missdona:

    I totally do that. Half my wardrobe consists of free shirts for volunteer activities or free shirts I get as part of my company’s appreciation award program.

  14. crabbyman6 says:

    Welcome to the life of any grad student. Free=instant need. I’ve gotten stuff I knew I didn’t even want just because it was free.

  15. Asvetic says:

    @Buran: You’re entitled to your opinions, but for my money Hershey’s is just fine (Then again, I might be biased living as close as I do to Hershey.)

  16. ratnerstar says:

    1) People who rag on Hershey’s are the worst kind of snobs. Dude, it’s chocolate, take your yuppie/bobo pretensions over to the wine aisle.

    2) I’d go for the free option too, because who the hell carries pennies these days?

  17. gmanj says:

    A much more legitimate test would be to offer Hershey bars for 35 cents at your door and simultaneously offer them for free (one per submission) if you send in a form on which you provide the 41 cent stamp.

  18. char says:

    Hershey’s isn’t terrible chocholate, not great either. Though they are pushing to make it terrible by having the term “Chocolate” redefined to not contain cocoa butter.

    American food processors, slowly killing their business in the quest of cost reductions.

  19. B says:

    What about the 41% of the people who chose nothing over the free Hershey’s?

  20. K-Bo says:

    @crabbyman6: My friends and I did that as undergrads. We went to the housing office almost every week to get the free boxes of candy, coupons and personal care samples. I even had a boyfriend who gave his mom one of those boxes for her b-day (ok, he used it to hide the dvd in, but she thought it was really the present, which was funny when she pulled the condom out and turned to her husband and said “and I thought you were fixed”) Crazy family.

  21. Brossman says:

    I think I’ll just drive 5 minutes over to Chocolate World and get some free chocolate that way.

  22. Metropolis says:

    @ratnerstar: While I like Hersheys there is a HUGE difference between the quality of Hersheys and Lindt. If I was only allowed one piece I’d rather pay 14c for Lindt than get free Hershey.

  23. missdona says:

    @gmanj: My hubby used to too. I brought in a professional organizer to “help” him with his wardrobe. She convinced him that he should not be a walking billboard for the local Jazz radio station or his company (that he doesn’t even like) when he’s off working hours.

    I am forever thankful for that.

  24. RandoX says:

    Ever been to Hershey, Pennsylvania? The whole town smells like chocolate.

  25. ceilingFANBOY says:

    Maybe the people didn’t have any change and the reason some of the people chose the Lindt chocolate was that anything below $1 was deemed insignificant enough to not worry about the price because they still had to break a dollar into change that they will most likely lose while the free chocolate later on would not require breaking a dollar.

  26. JustAGuy2 says:

    @hc5duke:

    Yeah, but the price difference didn’t change. If you thought that Lindt was worth 14c more than Hershey’s when they’re 15 and 1 cents, then why do you think it’s worth less than 14 cents extra when they’re 14 and 0 cents?

  27. gmanj says:

    @missdona: I work from home so I dress badly all the time.

  28. ceilingFANBOY says:

    @Brossman: But going through the oven part isn’t comfortable in the summer. :-/

  29. bonzombiekitty says:

    @tequilajunction: Some studies have shown that people do think in percent discounts. I remember hearing about a study sometime last year that went something like this:

    People were given a scenario in which they had to buy a clock radio. They had a choice between getting a clock radio at a store within a 5 minute walk for $20, or taking 20 minute drive to get the same radio for $10 and all other things would be equal. Most people opted to go to the store that’s a 15 minute drive away and save $10.

    Participants were then asked to change the situation some. Instead of buying a clock radio, they would have to buy a computer. The store within walking distance would charge $1000 for the computer, but the store a 20 minute drive away would charge $990. All other things would be equal (both stores offer the same warranty, they both have in-home tech support, etc). In that situation, people overwhelmingly chose to go to the store within walking distance.

    Now, either way you are saving $10, and rationally if the 15 minute drive was worth saving $10 in the first situation, it should be worth it in the second situation as well. But most people thought it of as 50% savings versus 1% savings.

  30. K-Bo says:

    @missdona: My mom get mad at my dad because all of his are from races he ran in, and have the date. She is less than happy that our vacation pictures from 2006 have him wearing a shirt that says 1993 on it. She says it’s hard enough to keep up with what year the pictures are from without him doing that, not to mention it advertises the fact his shirt is over 10 years old. Then again he has so many race shirts, it’s probably only been worn 3 times in since 93.

  31. missdona says:

    @gmanj: His t-shirts were overtaking our bedroom. It was time for an intervention, and by hiring someone, I didn’t have to be the ‘bad guy’.

  32. Buran says:

    @andrewe: I’ll try to see if I can get a friend up there to send me some then.

  33. asujosh1 says:

    Maybe people just didn’t have $.14 sitting in their pocket and didn’t want to have $.86 floating around afterward?

  34. missdona says:

    @K-Bo: I feel your mom. I would totally lose my noodle over that.

  35. SOhp101 says:

    When something’s free, you don’t have to fish for change.

    When something costs one cent versus fifteen cents the price difference, for most Americans, is virtually negligible. People will choose the one they think tastes better.

    That’s not to say that I don’t agree with the conclusion, but I’m not sure if the data completely supports it.

  36. hc5duke says:

    @JustAGuy2: That’s one way to look at it, but my line of thought is, one thinks that the Lindt was valued at 15 times the Hershey’s, and when it’s 14 cents vs 0, the 0 is always going to be a better deal.

  37. ancientsociety says:

    Lindts > Hershey’s

    @ratnerstar: People who think I’m a “snob” because I prefer a less popular, more expensive item over a particular popular item are douchebags of the highest caliber. Congratulations!

  38. emjsea says:

    Interesting. To me the Lindt is “low value” because it tastes the same as Hershey’s, but costs oh so much more. I guess it appeals to those folks who think paying more for something makes them special, but not to me.

  39. SinA says:

    I wouldn’t say that means consumers behave “irrationally,” just differently. For one, chocolate is a minor-luxury. Try the test with water and see what happens.
    Two.. The value of anything “free” is ∞/$, way better than a savings of $.01 for the Lindts.

  40. K-Bo says:

    this reminds me of the commercial for “memory supplements” that says “we wouldn’t give it away for free if it wasn’t good” my first thought is always “you get what you pay for”

  41. disavow says:

    Interesting study….Would it be possible to tag links to PDFs with [PDF] or something? I usually have to switch browsers or Adobe locks up my computer for several minutes. Thanks.

  42. Buran says:

    @ratnerstar: I’m not a snob. I just don’t like the flavor much. Not liking something doesn’t make me a snob… it just means I buy something else and don’t think Hersheys is worth the money.

  43. randombob says:

    @tequilajunction:

    EXACTLY, they’re thinking whole-value, I instantly thought % reduction. The hershey’s was now 100% off, the Lindt was a singe-digit % off. The Hershey’s is Free, the Lindt you pay for.

    Let’s make this look as logical as it is: If your’e presented with paying for something or getting a “lesser-quality” alternative for free, why wouldn’t you take the free one? It’s FREE. That means there’s NO COST WHATSOEVER for at least trying it. Hell, take the Hershey’s it may not taste as good, but if it satisfies you, then you didn’t have to pay a dime (or 14¢) for it. However if you decide that it’s NOT to your liking, you STILL didn’t pay a dime (or 14¢) for it. And maybe you go and get something else, too.

    @missdona:
    The reason people get giddy over it is that it’s COST FREE. I mean, hell I don’t care if a T-shirt that’s FREE is ugly. Who the hell says I’m going to wear it? Maybe I’ll just turn it into a dish rag or bathroom rag or wipe my ass with it. Then, it was a rag I STILL didn’t pay for. FREE=FREE, so I don’t care.

    ***

  44. girly says:

    I don’t like this example either. In the chocolate thing you really are getting the Hershey’s totally free. So it is the more obvious choice.

    Reducing the cost to zero is not the same as reducing the cost by some lower percentage. (as other people mentioned).

    With ‘free oil changes’ vs 1k, you are still paying for the car, so I think most ppl would take the 1k.

  45. zibby says:

    As usual, I’ll use this post to reiterate how much much I hate that damned “free stuff” scrubs. I once worked at a full service gas station/convenience store that offered a free 10oz Pepsi with fill-up on Tuesdays. Fill-up, by the way, was an 8 gallon minimum. NOBODY wanted to work Tuesdays, nobody. Why? Because all day you’d be dealing with the kind of turkey heads that would go out of their way for a free (10oz!) Pepsi – the dregs. And all day you’d be having the same arguments, even though the rules of the game were in large print. After a 3 gallon fill-up: “But I filled it up…!” After an 8 gallon non-fill-up: “But I bought 8 gallons…!” After G-d-knows-what: “I thought all I had to do was stop in for a free Pepsi…!”

    Needless to say regular, decent customers got the Pepsi virtually for the asking.

  46. tmed says:

    14c? That is an annoying price.

  47. wezelboy says:

    @ratnerstar: Dude, people who rag on people who rag on Hershey’s are the worst kind of boors.

    I’m lucky though. Our boss buys us the “monkey” chocolate, which is now the standard to which I hold all other chocolate. It is quite exceptional and surpasses even the finer Euro stuff. You can find it in your favorite hippy store.

  48. girly says:

    @zibby: How do you know whether they filled up their tank or not?

  49. missdona says:

    @randombob: For me, free stuff has a cost. Free stuff (unless it’s consumable, like chocolate) takes up space in my life, and sometimes I would rather have nothing in the space than something I will have to dispose of in time.

    Come to think about it, even free chocolate can have a cost… time on the treadmill to burn it off.

  50. girly says:

    @missdona: but if you would have eaten chocolate at some point anyway, then it’s time on the treadmill you would have needed regardless

  51. savvy999 says:

    At the height of the dotcom bubble, a place I worked for let workers get free sodas out of the soda machine in the breakroom. It was great.

    That is, until people (including directors who were making well over $250k a year) started emptying the machine out into coolers they brought from home.

    Moral of the story is, regardless of resources, everybody loves getting free shit and will generally take it all if they can get it for nothing.

  52. zibby says:

    girly, (sorry, my respond button isn’t showing) I was the one pumping the gas. If they didn’t request a fill up and the nozzle didn’t shut itself off before I hit their requested dollar amount, there was no fill-up.

  53. Sparkstalker says:

    See, the main flaw in this study is that it’s a momentary bite of chocolate, nothing more. In an instant, it’s gone.

    Here’s how I would propose they re-do the experiment. Go to a college campus and replace the chocolates with condoms. Generic, no-name ones and Trojans or such. Let’s see how many people will go for free when there are real consequences on the line…

  54. Echodork says:

    It’s a question of value, yes. But if I can get chocolate for nothing, vs. getting chocolate for having to fish 14 cents out of my pocket, then I might just swipe the freebie. Is a different brand of chocolate worth the expense of effort it would take to conduct a transaction?

    For me, probably not. Especially because I like Hershey’s just fine.

  55. parad0x360 says:

    All i saw was the word free in pretty colors so what are you guys giving away and how can I get alot of them?

    Oooo…I see what you did there!

    I think honestly it would depend on what you were doing or trying to buy but I do know from experience that just knowing something is free has caused me to take it even if I dont want or need it.

    I highly doubt someone could trick me with free oil changes or $1000 cash back. At a certain point in price range im sure the mind weighs value at a finer degree of scrutiny.

    If im buying say a House and the person selling it to me says…

    “Ok the house costs $200,000. You can either have a free in ground swimming pool or $20,000 deducted from the house, what will it be?”

    The first thing I would say is can I think about it? Then I would find out how much it would cost me to put a pool in.

    Of course even if the pool was under 20k I’d take the money off because I could then use it to soundproof a room and make a really nice home theatre. To hell with a pool…ok im rambling but I hope you see my point.

  56. Whitey Fisk says:

    Just wait until health care is “free.”

  57. missdona says:

    @girly: True, but I would probably skip the chocolate if I had to pay for it.

    @savvy999: My company had free sodas/snapples on the “well performing” floors and I would pick up a Diet Coke when I was there for a meeting. But you should see the crowds that would ‘just happen’ to have lunch in their lunchroom. They came from all corners of the building. Tons of people were making special trips to the floors (where they had no business) just for a free soda. And…that all went away on January 1 of this year.

  58. girly says:

    I don’t see how the consumers were ‘stupid’.
    Isn’t that the ‘I saved” (when you actually spent) mentality?

    “I spent 14 cents on a chocolate when I could have spent nothing and had a different chocolate. But I saved one cent!”

    The only way it would be stupid is if you really, really really wanted chocolate and you loved Lindt and loathed Hershey’s.

  59. wonderskunk says:

    @disavow: Try foxit reader – much better than Adobe and it’s a free download. Adobe reader isn’t worth fourteen cents.

  60. girly says:

    @zibby: Okay, that makes sense zibby!

  61. girly says:

    If you want to prove you “aren’t stupid” by spending a lot try some of this Chocolate

    [schakolad.com]

    pricey, but good. I could buy maybe 1 piece (LOL)

  62. Alexander says:

    What happens if people don’t recognize the Lindt brand of chocolage? Honestly, I’ve never heard of that brand…but I have heard of Hershey’s of course. Not that I’m a chocolage guy or anything.

  63. balthisar says:

    Typically I avoid free stuff because I’m a snob and don’t need anything given to me for free. Well, that, and if I have to wait in the line, then it’s not free, because my time is valuable. That, and even if it’s free, it’s probably a piece of junk or it wouldn’t be free. All that, plus I assume that there’s got to be a catch of some type, because nothing is truly free. It’s just easier to go where all the proles aren’t climbing atop each other and avoid it altogether.

  64. Alexander says:

    @alexander: Chocolate! Chocolate!

  65. samurailynn says:

    @Sparkstalker: I don’t think that would make a difference. Most college students will probably still choose free without thinking about whether or not the generic condom will be as good as the brand name one. I think it would be better if you offered free condoms that were in the package, but the package had been torn open vs. paying for the same brand of condoms in sealed packaging. The packaging being opened would probably give them thought that it was possibly tampered with.

  66. disavow says:

    @wonderskunk: I’ll have to try that out, thanks!

  67. hilighter says:

    @missdona: So so true….in my previous job, I had to work at many financial trade shows, and invariably, when we were giving away some cheap free pen or keychain, I’d get people asking if they could have five, one for each of their kids. It was especially disconcerting around the holidays, when I pictured these children opening their presents and finding a flamable, impritned couche ball or bendy keychain.

  68. Rajio says:

    I’m not a fan of lindt and would take the hersheys regardless. …..unless i could sell off the lindt to score me 15 hersheys!

  69. missdona says:

    @hilighter: At DigitalLife a couple years back, Divx was giving out codes on a postcard that would unlock their software and little ID-Holder hook things. Guess what people were hungry for?

  70. moore850 says:

    Free items have no negative impact. Anything that costs anything has the negative impact of you lose that amount of money. If a person has to choose between the economics of an item that reduces their available income to spend, and an item that has no financial impact whatsoever, why on earth would anyone choose to pay for the item, regardless of how much better it is?

    They would pay for it if it had some special added value that differentiated it from the free item. In the case of candy, lindt chocolate is close enough to hersheys that both are perceived as chocolate, and so both are subject tot he rule I noted above. However, if one was hersheys and the other was a car, you’re still going to sell some cars because people understand that a car has some value different than a hershey’s bar. Two different kinds of cars, and one is free though? Free car every time. After all, if the free car blows up, i can still drag its charred remains back and buy the car that costs money.

  71. MyPetFly says:

    I found Lindt in my belly button and couldn’t give it away.

  72. cde says:

    @moore850: Actually, just buying the item is not a negative impact, as you traded for equal value. You could always sell it off. It’s the eating part that has the economic negative impact.

  73. cde says:

    @missdona: Cause xvid is free and better.

  74. Anonymous says:

    @opfreak: I second that comment…the study proved nothing other than people will take free chocolates when offered…

  75. vliam says:

    I’d take the free one.

    I don’t carry cash and don’t want to run a CC transaction for 14 cents.

  76. moviemoron says:

    Take the $1000. Its worth more than the free oil changes.

  77. timsgm1418 says:

    I’ll agree with the Palmers, but there is nothing I like better than a Hershey nugget would pay a $1.00 for Hersheys over getting Godiva for free@starrion:

  78. timsgm1418 says:

    I don’t think that’s nice to bring up nightmarish ideas here…LOL @Whitey Fisk:

  79. nick_r says:

    People have known this for ages. All you need to do is look at the number of college students with six extraneous credit cards they signed up for to get a free t-shirt.

  80. teapartys_over says:

    @ratnerstar: Yeah, and what’s up with people who prefer a good restaurant to McDonalds? And people who say they’d rather have a glass of Chianti than Night Train? Freaking assholes.

  81. callistra says:

    If it were Godiva vs. Hersheys, I thin the results might have been different. I did a quick quiz here and most of my coworkers had never tried Lindt. I personally don’t like Lindt.

    So given the choice of recognizable for free (no hassle) or money for unknown, I’m not surprised.

  82. SeaKaySea says:

    This must trigger the same endorphin that makes us stupidly think “hey, it’s only a dollar” when it is priced at $1.99, vs. a $2.00 price tag.

  83. Patrickstt says:

    Is this really irrational as the article implies? It explicitly states, “Human beings are rational creatures who subtract costs from benefits to make decisions.” If the cost is zero, then the benefit infinitely outweighs the cost.

  84. surferboi says:

    This study neglects to mention opportunity cost and the added convenience of holding out your hand for chocolate vs. looking for a spare penny which nobody holds onto these days. In test case #1, I would take nothing, in test case #2, I would take the free candy. It holds the same for any good, cars, homes, etc. I wouoldnt take a cheap Geo Metro or a high-priced BMW if it cost 1:15. If you offered me a free Geo Metro or a slightly discounted (1/15) BMW, I’d take the free car and sell it for free cast (minus the opportunity cost of listing on Craigslist, of course).

  85. fizzyg says:

    If you actually read the paper there was also a condition (in the hypothetical situation study) that reduced the value from .27 to .02, thus recreating the same difference from .25 to free for one of the chocolates without involving a zero price point. Same percentage decrease, but it didn’t have the same incentive for participants.

    This hypothetical situations preliminary study also took care of some of the issues regarding making change…since they didn’t actually have to do anything with real money.

  86. FightOnTrojans says:

    @bonzombiekitty: F-that, I would have made my own option: _Drive_ to the closer store for the more expensive computer, and get those mother-effers to price match the other store, plus 5% more off. Then place the computer boxes in my car and drive home. Do you know how hard it would be to carry all those boxes home?

  87. CSUSam says:

    From one cent to free is a 100% decrease, and is indeed free. From fifteen to fourteen cents is a 15% decrease. I’ve never even had a Lindt’s. But I would get both, because variety is the spice of life.

  88. mcjake says:

    Dont forget that Lindt chocolate sucks and that hershey’s is good.

  89. quagmire0 says:

    I think of it this way: Chocolate satisfies a craving. If there is free chocolate and chocolate I have to pay for, unless it’s that REALLY cheap Palmer chocolate, I’ll take the Hershey’s. Hershey’s is good. Is Lindt better? Yes, but the Hershey’s WILL satisfy my craving for chocolate and I won’t have to pull out $1 bill and get change and all that.

    It’s kinda like with cell phones. When you sign up, they’ll offer you free phones and they’ll offer you ‘discounted’ phones that are higher end. Does everyone jump at the free phone because it’s free??? Probably not. I’d say a fair number of people lean more towards getting the ‘premium’ phones for a nominal fee – or even $100 more because they figure they were willing to spend the $100 in the first place. Me, I take the free phone because it satisfies my need for something to talk on.

    Bottom line – this study is flawed. :)

  90. econobiker says:

    The study shows what the credit card marketers know- FREE makes people irrational. Get a free shirt or personal drink cooler for signing up for a credit card. yeeeha…

  91. smoothtom says:

    @missdona: Hey, I wear free credit-card sign-up t-shirts to bed. I don’t care how crappy they look.

  92. shoegazer says:

    WTF? We all know why free stuff is good. IT’S FREAKING FREE. It’s like getting a “gift” only you have to give them the “gift” of your personal info back. Lovely. Where do I sign?

  93. missdona says:

    @smoothtom: I hope you didn’t get any “free” debt to go with that t-shirt. ;-)

  94. Cheve says:

    actually it’s stupid the way this guy looks at things, let’s assume a lindts “value” is 15 “points” and a hershey’s is 1 “point”, 15 points/15 cents =1 point per each cent, 1 point/one cent = 1 point per each cent.
    Now if you take that off, you get 15 points / 14 cents = 14+1 15th of a point per each cent, 1 point/0 cents equals infinite, it’s that easy, value over money, anything free gives you infinite value for your money, because you are not paying for it.

  95. SaraAB87 says:

    I take the free stuff and resell it, or I take the free stuff and donate it to charity. Usually the shirts and stuff go to the yard sale we have every year now, and if it doesn’t sell for a very very low price, then it goes to charity. There is always something you can do with free stuff! FREE is FREE, there is no cost involved, with the other option, there is a cost. What if someone just doesn’t care enough about chocolate to pay the money to get a piece?

  96. RandomHookup says:

    Still, it’s sometimes hard to get people to take free stuff. When Annie’s Pretzels had huge signs up on some special day earlier this year to give away pretzels, there was no line. No one believes in a free lunch. (But free tacos…yum!)

  97. MrWashy says:

    @quagmire0: Many people do indeed take the free phone, but then many people do equate free with good.

  98. lemur says:

    I am not an economist but I think Consumerist has misrepresented the study. Nowhere in there do the authors claim that people are stupid if they take the free chocolate. If I understood the study well, their point is that when one of two options becomes free, traditional models of “rational” costumer behavior fall apart. They are not arguing that people should behave differently. They are tying to improve the models used by economists and marketers.

    If somebody has read the study and found something different, please let me know.

  99. SacraBos says:

    Is this why people think that the $29.95/mo freecreditreport.com is so much better than the no-cost annualcreditreport.com?

  100. @ancientsociety: Hey, that’s way better than being a douchebag of the lowest caliber, right? ;)

    I don’t care where I get my chocolate as long as I get it. But I totally dig Hershey Park, and Milton S. was a hellova guy. Ya know, he started in caramel, and people thought he was nuts to sell his caramel biz and sink all his cash into chocolate… babble babble babble….

  101. lightmanjk says:

    Great interview with the author today on the Leonard Lopate Show on WNYC / NPR. Listen Here: [www.wnyc.org]

    Under the link to listen to the entire show there is a link to listen to just this segment.

  102. stevegoz says:

    One of the many things I don’t miss about white-collar office life was the way in which people making damn good livings would get so excited about (and wait in long lines during work hours for) any sort of free food. “Hey, the owner of our office building is giving away free ice cream bars down in the lobby — let’s go!”

  103. missdona says:

    I just came back from an event where they gave out goodie bags. They gave out one per invite and gave out the spares at then end. And people went crazy trying to get the extras. You’d think that one cow shaped stress ball and cheese slicer, per couple, would be enough.

  104. uricmu says:

    @starrion: Congealed floor wax? I’m sure that they are currently lobbying to include that under the legal definition of chocolate, just like cocoa butter.

  105. Grrrrrrr, now with two buns made of bacon. says:

    So this is news? Of course people will go crazy for free stuff. I live in a small New England town, and you wouldn’t believe all the people who show up at the town dump to paw through the “treasure house” in search of free stuff! There are just as many people shoving second-hand dishes into shiny Volvo wagons as there are into rusty pickup trucks, so the attraction is obviously not based on economic need.

    And then there are the yard sales…

    I wonder if stores make out better with “buy one get one free” sales than they do with “50% off” sales?

    As far as chocolate goes, I’ll eat either Hershey or Lindt, but I’ll only eat Palmer if it’s free :D (Palmer chocolate really does remind me of vaguely-chocolate-flavored wax)

  106. Parting says:

    I would choose Hershey.

    I found worms once in Lindt chocolates with nuts :(

  107. Parting says:

    @chouchou: After eating 2 already….

  108. FLConsumer says:

    Isn’t The Consumerist blog free as well? Hmm….

  109. BFIrrera says:

    Oil changes (for THREE YEARS) vs. $1,000 is a bad example, unless you can assume that the oil changes are cheaper than $27.77 and will remain the same price for three years (a $1,000 value). Otherwise, the oil changes are a better deal.

  110. BFIrrera says:

    @Grrrrrrrrr:

    YES! People WILL respond better to the phrase “Buy one, get one free” than they will to “50% Off” (many can not do the math and realize they are the same). I work at a major retailer and find this to be the case.

  111. Rectilinear Propagation says:

    @surferboi: I agree that the fact that they were asking people to pay with pennies skewed the results.

    A booth in MIT’s student center contained two cardboard boxes full of chocolates and a large upright sign that read “one chocolate per person.”

    By placing the price signs flat next to the chocolates, we could code each person who looked at the prices but did not stop or purchase, and classify them as “nothing.”

    Yeah, because if there’s anybody that’s got an extra penny or four in their pocket it’s college students.

  112. kc2idf says:

    …and yet people still pick Windows over Linux.

  113. Rectilinear Propagation says:

    @BFIrrera: The problem I have with “Buy one, get one free” vs “50% Off” is that they don’t necessarily mean the same thing. I make sure I read the sales tags because sometimes “Buy one, get one free” or “Get X number for Y dollars” only works when buying 2 or Y. If you just get one it’s still the regular price.

    I’d rather be told it’s half off if that’s the case so I don’t have to ask somebody if the ad doesn’t make it clear.

  114. SkyeBlue says:

    My favorite “freebies” are the ones on the tv commercials where they tell you that if you buy their product you can recieve free lifetime replacements and all you have to pay is “shipping & handling”!

  115. l951b951 says:

    I would like to see this on a grander scale. What if you could get a free Hyundai or 25k off a Mercedes? How would people react?

  116. Parting says:

    @kc2idf: It’s more to do with knowing how it works :) I’m not sure, I will be able to run all my application smoothly on Linux. Just not enough technical knowledge.

  117. nardo218 says:

    @bonzombiekitty: Who the hell wants to walk a computer home?

  118. dennyabraham says:

    Reading the design of the study, the problem was that to pay 14 cents, participants had to fish change by themselves. However, anyone who wanted a Hershey’s could just take one. Not only that, nothing prevented them from coming back later and taking another one.