Bias in Real Life: A Personal Story

All too often, I, like all too many Americans, will walk into a fast food joint.  As is well known, the fast food industry has, for a good number of years now, been pushing combination meals — a single order will purchase a main course (classically, burger), a side order (fries) and a drink (coke).  As is also well known (pdf), people respond to cues like this in judging how much to consume — if something is packaged as a meal, we process it as a meal.  (In case that link doesn’t work, it’s to Brian Wansink & Koert van Ittersum, "Portion Size Me: Downsizing Our Consumption Norms" Journal of the American Dietetic Association 107:1103-1106 (2007).)

All this stuff is old news.  But, I wouldn’t expect myself to fall for it (which is the point of this post: I did).  I’m a pretty cynical and suspicious guy, a cynicism and suspicion that rises to almost downright paranoia when it comes to marketing.  (I’ve been known to heavily discount a health threat the moment someone starts selling a product to protect against it, for example.)  I flatter myself by thinking I’m somewhat intelligent.  And I’m well aware of the above research. 

Yet every few weeks until today, I’d walk into a Taco Bell and order one of those combo meals.  This is so even though I often don’t particularly want one of the items on the combo — I’m usually fairly indifferent between, say, having a soda and just drinking water.  Since water’s free and soda isn’t, rationally, I should just drink water every time.  So why do I order the combo meal?  Well, it’s in a combo meal — presumably, it’s cheaper than buying the items separately.  I’m saving money!*  Or, at least, this is the rationalization my brain would supply, on a level just below consciousness except on those rare, fleeting, and unproductive moments when I’d bother to think before ordering.**

Recently, in order to live a little healthier, I made a firm decision to stop consuming sodas.  So it was actually easy to figure out how much I was "saving" by ordering the combo meal instead of all three items.***

Guess how much I saved.  Go ahead.  Guess.  In the comments, even, if you want (status points to the first person who gets it right).  Highlight the space between the brackets to see, after you’ve guessed. 

[Combo meal savings over ordering all three items separately: $0.08.  Extra combo meal cost over ordering just the two items I wanted: $1.61]

I fell for this kind of stupidity even though I know the research.  Do you? 

I really think this bears emphasis.  I know this research really well, and I have known it for over a decade.  If they can get me, they can get anyone.  Everyone, even serious experts, even the guy who largely invented the study of these common biases, can fall prey to this kind of thing.  Dare you think you’re exempt? 

Do you think maybe this contributes to our obesity problem? Or do you still think that overeating can casually be described as a "free choice" for which people are personally responsible?  (While Taco Bell profits from selling unwanted sodas…)

Policy message: if even informed people can be suckered like this, maybe it is time for a legislative solution

—-
* Even if this were true, one isn’t saving money if one buys something one doesn’t actually want, in order to get it at a discount!  There’s another sinister anchoring effect at work: one’s comparison case becomes "buying all three items at full price," not "buying only the two items one wants" (which is invariably cheaper than buying all three). 

** That is, I’d basically process sodas as free because of the imagined "combo meal discount", and hence be indifferent between them and water, even though it’s actually more expensive.  Then, ordering the combo meal is the path of least resistance.

*** That’s not so easy to do unless you actually order the items individually and compare: not all the prices for individual items show up on the menu.  Fortunately, the sodas do, so I could add the price of a soda to what I paid for the other two items and thereby learn the non-combo price for the three items. 

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  • Ian C.

    Maybe “combo meal” was never intended as any sort of discount mechanism but just a phrase to speed ordering.

  • http://www.transhumangoodness.blogspot.com Roko

    “Policy message: if even informed people can be suckered like this, maybe it is time for a legislative solution?”

    – Good luck with that in America, Paul ;-0

    I think that the US public has an irrational faith in free market capitalism that will simply stop them from listening to what you’re saying.

  • guyf

    Roko: Why does faith in free market capitalism prevent a legislative solution? I don’t see why tricking people into buying more of your product has to be acceptable in a free market.

    On the other hand, I’m surprised that people fall for this. I eat at fast food joints a lot, and I don’t feel at all compelled to get the combo meals (though I sometimes do), and I almost never end up ordering too much. On the rare occasion I do order too much, it’s not a probelm. I just save the rest for later in the fridge or throw it out.

  • http://lightskyland.com Matthew C.

    Sorry Paul very little sympathy for you here. Like most people I know (very few of whom are world-class intellects), I purchase the appropriate amount of food when I go to fast food restaurants.

    I almost never order the combo meals because (as you have figured out) soda with corn syrup is very bad for you (and fries too for that matter). To drink I get the free cup of ice water.

    I also usually order the smallest possible burger because that is the appropriate size for my appetite / calorie needs, or two of them if I am especially hungry, because the 99 cent sandwiches are a much better deal than the $3-5 sandwiches at most fast food joints.

    Of course, my low-priced lunches would not be possible without the less price conscious who buy the combo meals subsidizing the labor and fixed costs of the restaurants.

    I find it amazing and fascinating that you believe that the institutions that funnelled away money from New Orleans levees to spend on political graft, run the Washington DC public school systems, build $150 million dollar “bridges to nowhere” and have written 6 million pages of regulations that businesses are expected to comply with in toto, will somehow draft well thought out regulations on “combo meals” with overall welfare-enhancing results.

  • Grant

    Policy message: if even informed people can be suckered like this, maybe it is time for a legislative solution?

    I understand your concern, but frankly don’t see what the problem is here. If $1.61 was important to you, you’d probably have done the math a long time ago. Obviously it isn’t, so you simply picked the easier option. My question is: What would a poor person have done?

    Food sellers need to package items together as meals to inform the consumer of what items they believe go well together, and which meals are the most popular. They also need to keep the ordering process fast and smooth. To be honest, I never thought savings for the consumer was a big factor here.

    I too typically order something like “I’ll have a #2 with a water, and not a soda”. Most of the drive-thrus around me give me a discount for the water, but some don’t. I’m not sure what Taco Bell does because I don’t eat there.

    I’m not really familiar with the research on bundling goods though. Typical economics says it can increase profits without the need to fool anyone.

    I admit I’m a fan of free markets even with significant information asymmetries, because they reward logic and penalize bias. If we want people to become more logical and less biased, we have to reward them for becoming so, right? I am not aware of any way of achieving the for-mentioned goal (at least not without having some central authority decide what “unbiased” really is, which I don’t think would really be a solution).

    I also share Matthew C.’s skepticism that a central government is capable of crafting good legislation here.

  • http://occludedsun.wordpress.com Caledonian

    Or do you still think that overeating can casually be described as a “free choice” for which people are personally responsible?

    Sure – people don’t stop being personally responsible for their choices just because they tend to make bad ones.

    Frankly, I think the real problem here is that you have a vastly inflated sense of your rationality and resistance to manipulation, a feeling that you’re not only different from most people but better and wiser. There’s nothing wrong with feelings like that – as long as they’re accurate. Your amazement at finding you’re making a suboptimal choice because you chose immediate convenience over thinking about your options would seem to be… misplaced. That should be unsurprising; the fact that it’s shocking to you speaks volumes.

    Policy message: if even informed people can be suckered like this, maybe it is time for a legislative solution?

    1) The evidence suggests that, at least on this topic, you were not an informed person at all, 2) your attitude that “even I could be suckered” shows that you’re lacking a necessary and accurate humility, and 3) expecting society to institute controls to preserve you from the consequences of your failure to think things through is a terrible idea, both in the near- and long-terms.

    Tell us: what laws can be implemented to prevent you from making thoughtless purchasing choices? What legislative solution exists to the problem of poor judgment besides taking away the ability to make decisions?

  • poke

    People don’t make rational choices in these situations. Usually there’s a line behind you and most people want to get the transaction over with as quickly as possible. Recently I was purchasing a sandwich and a drink before a train journey and I was told that I could choose a free chocolate bar to go with it. Given the conditions (long queue, train to catch, etc) I just picked one up and put one on the counter. I had no interest in eating it, however, and threw it away shortly after leaving the store.

    There’s a political bias here. People who believe in bias, who understand psychology, even people who reject free will, will cling to incompatible libertarian ideals for separate and irrational reasons. Libertarianism is, however, completely incompatible with even the most basic understanding of psychology.

  • Shmuel

    What does one call the kind of bias where one thinks one is too smart to be biased resulting in more frequent bias?

  • Caledonian

    Libertarianism is, however, completely incompatible with even the most basic understanding of psychology.

    There IS a political bias here… although it’s not what you think it is.

  • Grant

    poke, I’m not really seeing what libertarianism has to do with questioning the efficacy of anti-bias legislation. Consider,

    1) Legislators are biased as well.
    2) Legislators are subject to a large number of incentives that have nothing to do with the public good.
    3) Legislators have enormous informational problems to overcome. Even if they are unbiased and honest, how are they to know what anti-bias legislation to vote for? They can’t be experts in everything.
    4) Even if we can find or create an unbiased legislator, we need a process to pick/create that legislator over other alternatives.
    5) Even if we can pick/create the unbiased legislator, we need a process to pick/create an objective definition of “unbiased”, continue ad infinitum.
    6) Voters are very, very biased. I would say that in their capacity as voters, people are much more biased than they are when they are purchasing fast food.
    7) If we dodge the biased voting process and rule via conquest or trickery (ala Putin), we are not likely to get rulers who care one wit about the public good.
    8) It seems to me that negative liberty rewards rationality and punishes bias without needing an objective definition of “biased” and “unbiased”.

    I think I just argued against most anti-bias legislation without evoking any libertarian ideal.

    Shmuel, maybe its called metabias?

  • http://www.iphonefreak.com frelkins

    @Paul Gowder

    “All too often, I, like all too many Americans, will walk into a fast food joint.”

    And that is the mistake. Be more Zen: Just Don’t Do It. Cook at home.

    I remain amazed at people who tell me they “don’t have time” but when you consider getting into the car, driving to the place, getting the food, bringing it back, or even just waiting for the delivery – you can cook delicious & much healthier things in that time period. And more cheaply too.

    For example, I live in pizza-obsessed NYC. But even without the coal oven, I can make pizza at home from scratch – and do every Sunday – that’s completely amazing and costs just $3.50 per 12″ pie, with organic flour, organic tomatoes, organic olive oil, fresh basil, and organic mozzarella. Non-organic ingredients would cost less of course. Don’t just think about your costs from the soda, Paul.

    Think about cost. . .and value. . .overall.

    It takes about 30 mins. of actual working spread out over an afternoon of mostly waiting for the dough to rise, while I do other things.

    Using the USDA nutrition database, I easily calculate that my pizza has only 206 calories per 3 oz. slice, compared to say Pizza Hut’s closest offering, which clocks in at 361, according to fast food websites. Plus mine tastes much much better and has less salt, etc.

    If you were going to contemplate some kind of government program, it should be one that restores a mandatory cooking class in public schools for all students. This used to be called “home ec.” This would teach people good nutrition information, reasonable portion-sizing, basic home-cooking sanity, and generally give people the tools & skills to combat the poor eating habits that lead to socially expensive obesity.

    A supporting co-program would be the one we used to call “gym,” which has generally been eliminated in favor of “teaching to the test.” But it should be a more personalized and modern form that incorporates contemporary science as well as introducing people to activities they can enjoy all their lives such as yoga, cycling, and dance.

  • poke

    Grant,

    It is far easier to implement anti-bias measures within the government that among the population, as evidenced by the fact that government officials are subject to extensive anti-bias measures already, whereas the population is not. The problem comes with doctrinaire libertarianism that claims state intervention is always bad, people are always responsible for their actions, etc.

  • http://www.hopeanon.typepad.com Hopefully Anonymous

    Paul Gowder,
    Great post. As you can see by the status-hungry shmucks that rushed to fill the comments, a version of what Roko wrote may be accurate. This line takes the cake: “Like most people I know (very few of whom are world-class intellects), I purchase the appropriate amount of food when I go to fast food restaurants”. *snort*

    I forgive you, Paul, if you’re starting to think Americans already get the legislative protections (or lack thereof) that they deserve.

  • http://lightskyland.com Matthew C.

    I notice that HA has failed utterly to provide any argument whatsoever why government regulation of fast food menus will work out any better than any of the other failed leviathan projects I mentioned. . . He simply dives right into his ad hominem attack (of course, we are supposed to accept on faith that HA is completely lacking in any status-seeking motivations driving his eruption of snark onto the thread).

    I’m convinced that for many self-proclaimed rationalists, the “God-shaped hole” in their cognitive model has simply been replaced by an irrational trust in government beneficence and positive outcomes.

  • Jadagul

    I’m not going to get into the political discussion, except to note that in J-morality (you all are following Eliezer, right?) attempts to protect people from themselves are ipso facto wrong.

    As for the bias note: I almost never get a combo at a fast food restaurant, because I don’t like soda. But I generally check out the price differential, and I usually find myself saving about 10-15 cents by not getting the drink. I don’t get it because the drink isn’t worth fifteen cents to me.

  • http://www.daegmorgan.net Raven Daegmorgan

    @Matthew C.
    Better to believe in something that might work than a fictional sky god. One has a better chance of producing positive results than the other, and a visible track record of such.

    And of course the corollary to your statement is that libertarians and anarcho-capitalists and such have replaced their god-shaped hole with an irrational trust in the inherently good-nature of ungoverned mobs and the claimed almighty equalizer of the Free Market, etc.

    @Caledonian
    The point Paul is making is that one is not free to make accurate judgments for which they can be held responsible if the other party is manipulating the situation or human nature with a little basic corporate psychological trickery.

    I’ve found there are some groups who often make arguments that treat each human being as a perfectly rational actor, for whom all answers are obvious (particularly the “right” ones) and were simply rejected foolishly, and that all details, facts, and data that might influence a decision are immediately and obviously apparent to any given actor. Which is nonsense. People are not rational actors, there is a reason hindsight is more powerful: rationally, con-men should not be given free reign to pull cons on people simply because people’s judgment is not perfect.

  • steven

    People “manipulate human nature” in all sorts of ways, most of them not normally thought of as “economic”, but nobody’s proposing for government to regulate those. It’s as if people think human actions fall into a separate magisterium whenever they involve exchanging green pieces of paper.

  • WTF

    I can’t believe it…

    A post on OB that is both informative AND does not succeed at being a self-important “look how smart I am” rambling. Excellent, Paul. I hope to see more of your posts.

  • http://www.hopeanon.typepad.com Hopefully Anonymous

    Paul basically said it was an empirical question, the efficacy of legislative solutions to correcting the negative consequences of a human bias and what may be corporate attempts to increase revenues based on it. The reflexive libertarians in this thread don’t seem to think the topic is worthy of further empirical study. Since I think their position sounds weak (faith-based, not empirically grounded) even to themselves, they seem to want to reframe Paul into a similarly weak position, that of someone advocating more central governmental regulation, when at most he seems to be advocating more experimentation and empirical research on that topic.

  • steven

    Since I think their position sounds weak (faith-based, not empirically grounded) even to themselves, they seem to want to reframe Paul into a similarly weak position, that of someone advocating more central governmental regulation, when at most he seems to be advocating more experimentation and empirical research on that topic.

    It’s either that, or that they bothered reading the original post.

  • Ian C.

    @Hopefully Anonymous: I don’t know the Libertarian theory or follow their system, but I have to catch you on the point that belief in free markets is faith based. Historically, empirically it has been the most successful system.

  • http://yorksranter.wordpress.com/ Alex

    Maybe “combo meal” was never intended as any sort of discount mechanism but just a phrase to speed ordering.

    Touching faith.

  • Grant

    I would say combo meals:
    1) Take advantage of bundling to increase revenues.
    2) Speed up ordering.
    3) Inform the consumer of popular menu choices.
    4) Rip off some people who don’t want certain items and don’t bother to do the math.

    poke, what anti-bias measures are politicians subject to? There are many studies showing how irrationally biased voters are. Wouldn’t you agree that your average citizen has stronger incentives to be rational in his food purchases than in how he votes?

    I don’t see any need to get political. We are comparing democratic vs. market processes and the rationality of the decisions they make. I’m just trying to point out that market processes seem to reward (and thus increase) rationality much more strongly than democratic processes do, which fall victim to normal collective action problems (i.e., good government is an under-provided public good). The existence of irrational market actors doesn’t imply those actors would function more rationally in a democratic setting; in fact I’d say the opposite is true.

  • http://entitledtoanopinion.wordpress.com/ TGGP

    Paul, I value junk food a hell of a lot more than I value anything about you. But in the interests of novelty I’ll be willing to make a tradeoff. What sort of harm would you be willing to let me to do you in exchange for taking away something I cherish?

    It should be remembered that the L.A ban only applies to NEW restaurants, so people can still get fat in old ones. Hell, established owners might be behind the ban. I found Sailer interesting on the subject here.

    Hopefully Anonymous has a recent post (perhaps inspired by this) on health paternalism here.

  • http://www.scottaaronson.com Scott Aaronson

    I’ve heard of fast-food joints that take advantage of “combo bias” to charge more for the combo than for the separate items—has anyone seen firsthand examples of this?

    Though it’s a little embarrassing to admit it, I attach a significant hedonic value to avoiding annoyed, who-is-this-person? glares from waitstaff, store clerks, and counter workers, and that often leads to my avoiding even slightly unusual requests if a conventional but more expensive option will suffice. Could this psychology be part of the reason most people order the combo?

  • Jordan

    Another reason that people might order the combo is that they actually DO want the soda. Even when you don’t ‘want’ something (consciously) it is easy to overlook bias that would prevent you from getting it when you’re addicted to that substance.

  • Romeo

    I’m always baffled by this. Especially when, as in this case, an otherwise intelligent person is still falling for it. I don’t seem to have much trouble with any of the biases related to language. I think this is because I grew up in an environment of people saying one thing and doing another, consequently I ignore verbal cues and focus the vast majority of my attention on actions. This has been in some ways an advantage, but I do tend to gloss over verbal details that later turned out to be important.

  • http://pdf23ds.net pdf23ds

    Didn’t read the thread, but one time I tried to order something at Sonic without the drink, and they said it was cheaper with the drink because of the combo discount. The discount actually does exist at some places.

  • Nominull

    I’ve seen comboes more expensive than ala carte items exactly once, at Subway, when one of the items in the combo was on sale ala carte. I don’t imagine it happens often, they need plausible deniability.

  • Jordan

    You need more than plausible deniability. The people working these restaurants don’t care at all about the bottom line for the owner, but at least some of the employees must have both a basic sense of math and ethics enough to not want to fleece people. I’ve been told numerous times by people working the register how to order what I’m ordering cheaper.

  • constant

    That’s nothing. Newspapers are much more guilty of packaging stuff I want with stuff I don’t want and charging me a price for the whole thing, and what’s worse, they don’t even offer me the option of buying the sections of the newspapers separately.

    So, yes, let’s make it illegal to offer combo meals. But before we do that, we need to make it illegal to offer newspapers. What should be offered are newspaper sections.

    Upon further reflection, there is a problem with individual sandwiches. While McDonald’s and Burger King will take individual items out of the sandwich, they (with obvious purpose) make this much more difficult than simply ordering their package-deal sandwich with all ingredients included. Agreed – it should be illegal for fast food joints sell, as a single item, a meal consisting of sandwich, fries, and a soda. It should furthermore be illegal to sell, as a single item, buns, a meat patty, ketchup, mustard, and diced onions. The con artists who do this should be dealt with seriously.

  • http://www.hopeanon.typepad.com Hopefully Anonymous

    I think smart people who should know better (for example, a lot of the economist friends of Robin) bear some responsibility for the way reflexive libertarianism has been sold to a lot of people (represented by a lot of the posters in the comments), rather than empiricism. It seems to me we’re all bearing the negative externalities of the worldview crap some of these smart economists that should know better have put out.

  • Ben Jones

    What frelkins said.

    My girlfriend and I have a list of places (Maccy D’s, Burger King etc) that incur a £5 fine payable to the other on entry. So far I’m around £15 down. But I have the warm glowing warming glow that comes from 100% rational dining!

    A topic I often wonder about: we so often look to budget or economise, for time and money, when it comes to eating. I’m baffled by the nasty crap people will eat because it’s cheap or easy. Not only is this something that you pretty much need to do three times every day, it’s something that has a direct, instant, lasting effect on your health. What is more deserving of your cash, time and effort? I’m making pizza tonight, goddammit.

  • Sirisa Clark

    £15 down? I’ve never seen a penny of that money Ben, so clearly the system isn’t working…

    I think in the UK we’re more used to seeing deals where you get something unsolicited free. So you go to the cinema and want to buy some popcorn and a drink, and they tell you for the same price you can have the meal deal and add on some nachos. And so even though the popcorn portion is bigger than your head and the drink probably contains your guideline calorie allowance for the day, you think “ooh, free nachos”.

    Everybody loves getting something for nothing, so it does take an effort of will to refuse that free food. It also makes you feel like you’re getting one over on them, because they just fleeced you for £5 for something that would cost maybe £2-3 in a normal shop, so you might as well take their free food. So you come away feeling like you ‘won’ that bargain and didn’t get ripped off, and they still made a tidy profit selling you something you didn’t want.

  • http://hanson.gmu.edu Robin Hanson

    Clearly a lot more discussion and analysis is required to go from the identification of a bias, such as for combo meals, to the endorsement of a particular legislative proposal to mitigate it.

  • http://zbooks.blogspot.com Zubon

    I concur with Grant’s four points.

    Sorry, but how was the original post a revelation to anyone, including you, Paul Gowder? This is not arcane reasoning: it is addition of three numbers. If you are not good at math, you probably carry around a cell phone that has a calculator function. All three numbers are on the menu. I can understand being surprised at the hidden answer if you had not added the three numbers, but we need a legislative solution for “I don’t want to use arithmetic when I buy fast food”?

    Then again I have been told before that knowing how to use arithmetic is more technocratic than I think.

  • Douglas Knight

    HA,

    you seem to be reading a very different set of comments than I am. Let’s focus on Matthew C’s first comment, because you specifically addressed it and I think it’s typical. You quote its first sentence, which sounds like it’s heading towards a bad strain of laissez faire, but the actual complaint, in his last paragraph, seems to concede the possibility of good regulations and only dispute the possibility of its implementation. He doesn’t even make a theoretical public choice argument, but an empirical one about the actually existing US government!

    I’m not sure how, exactly, but it’s a very bad sign when you complain about empiricism. You become dogmatic and stop reading sympathetically.

  • http://www.hopeanon.typepad.com Hopefully Anonymous

    Douglas, your analysis is welcome, but I think the actual content of the comments are there for any reader to judge. Readers are free to make their own judgments, unmediated by either you or me. As for the Matthew C. post, I think it does tend toward reflexive libertarianism rather than from empiricism/experimentation, but as I think I made clear, I quoted the first line for its notable status-hungry shmuckiness.

  • steven

    If I were status-hungry I’d post left-wing stuff all the time; even in places where left-wingers and right-wingers are equally common, left-wingers seem much more inclined to punish people socially for having the wrong opinions.

  • http://www.iphonefreak.com frelkins

    @Ben Jones

    “I’m making pizza tonight, goddammit.”

    Good on you. I’m interested in your recipe; please email it. I will likewise offer mine.

    I also recommend Carlo Middione‘s; his book on southern italian cooking remain classic.

  • josh

    HA, don’t you think the posts call for a legislative solution seems as reflexive and reactionary as any of the libertarian commenters?

  • http://occludedsun.wordpress.com Caledonian

    @Caledonian
    The point Paul is making is that one is not free to make accurate judgments for which they can be held responsible if the other party is manipulating the situation or human nature with a little basic corporate psychological trickery.

    So people’s choices stop being free if other entities are trying to incline them.

    Do you ever read the things you write down? Do you ever think that maybe, just maybe, they’re utterly ridiculous?

  • http://uncommon-priors.com Paul Gowder

    I think the comments here warrant a follow-up post rather than replies within… forthcoming (as soon as I get around to writing it).

  • http://www.hopeanon.typepad.com Hopefully Anonymous

    Josh, yes one can be reflexively legislative. But here I see reflexive libertarians reacting to an experimentalist suggestion. Because I think even they see that theirs is the weaker position, I think they’re recasting the experimentalist suggestion as being reflexively legislative. They’re seeking a dialectic between two lesser positions, I suspect in the hope of keeping their myth viable.

  • constant

    HA – Adding “maybe” and a question mark does not make a weak position into a strong position, but rather makes it officially into a non-position (since a question is not a statement) while at the same time retaining, as a suggestion, the weak position. Jon Stewart has rightly ridiculed this tactic.

  • DAG

    Legistators: Sir, we think you are making a poor decision economically and nutritionally and we have decided to prevent you from engaging in such such self destructive behavior.

    Man: But I like my Happy Meals!

    Legistators: Too bad. We know for a fact that soda is bad for you and in truth many of your fellow customers would be just as happy with water. So to prevent this travesty from continuing, we are forcing McBurger to unbundle all their package meals and require you to order a la carte.

    Man: But that will take forever at the drive-thru! It’s so simple to order a #5 and be done with it. Besides I like soda.

    Legistators: Tough nuts. Some of your fellow citizens think that you’re too uneducated to choose wisely and we, the government, should limit the choices placed before you by large, self-serving corporations like McBurger. Besides do you know that you can get more calories per dollar by buying tofu burgers down the street at the vegetarian restaurant.
    We are now considering new legislation to require all restaurants to carry tofu burgers.

    Man: I hate tofu.

    Legistators: You’ll learn to like it. And to boost the tofu industry, we are placing a global warming tax on all hamburgers. Do you realize how much global-warming methane a cow farts over its lifetime??? This must be stopped.

    Man: But won’t this put McBurgers out of business? Where will I get my Happy meals?

    Legistators: We expect some temporary economic dislocations, but we must all make sacrifices for the Common Good.

    Man: (expletive deleted)

  • Ben Jones

    @frelkins

    Can’t go wrong with Delia Online. Don’t have a ‘pizza stone’ but a baking tray did just fine. Topped it off with mozzarella, mushrooms and some softened red onion and yellow pepper.

    When does a convenience become a bias? I’m yet to be convinced that there’s actually a problem here. The joints want you to order more, you want to order quicker. Them being the experts, they pitch it at a point where the saving/convenience outweighs the trouble it takes to order separately. Was it not ever thus?

  • Grant

    I’m wondering what libertarian myth HA is referring to? With the possible exception of some rabid Rothbardians, I don’t know any libertarians who reflexively assert that all coercive interventions are necessarily bad. Most just think they tend to produce bad results. I personally believe that any group which has coercive power over another group will not tend to act in its best interest, and that using government to correct bias is problematic because the incentives (or even the ability) to accurately define what is rational just don’t seem to exist (as they do with individuals, who are rewarded for rational behavior).

    Toss the knowledge problem into the mix, and you can easily see why someone would always prefer peaceful solutions. I’m not a bias expert or a fast food expert; I can’t know what the best solution to the Happy Meal Problem is. So I “reflexively” trust my heuristic instead, and believe that the coercive solution is probably not going to turn out well. Does this sound irrational?

  • Floccina

    1. It is easier to order the combo.
    2. Water signals cheapness.

    Order the combo and throw away what you do not want.

  • Floccina

    PS
    perhaps if they had a diet combo and charged the same amount for the combo with water and a salad instead of soda and fries.

  • http://www.daegmorgan.net Raven Daegmorgan

    @Steven

    I’m not certain if you are deliberately mischaracterizing my point, or simply had not thought through the response: this has little to do with money by itself, as one could see the same argument made with the intent to manipulate people for other resources (for political power), emotionally (via bullying or to obtain sex), or intellectually (as with Creationism).

    Rationally, we must both agree that there is a level of normal social manipulation that occurs in regular human interactions, and must also agree that when con-men utilize the same they can hardly be considered comparable or of the same type in intent and outcome.

    Otherwise, if I sell you a bridge I do not own, you should not be allowed to arrest me on the basis that I “misled” you if we are to treat such manipulations the same as those occurring in normal interactions, but as we do not expect these manipulations to benefit you while inconveniencing us, or rather, that you are not using the manipulations to deliberately deceive or mislead us. Therein lies the difference.

    This is also where constant’s argument about newspapers falls down: there’s no trickery involved in getting things you don’t want with the newspaper or manipulations making you purchase a more expensive newspaper stuffed full of confetti over a less expensive one that doesn’t include confetti, while being told its cheaper (overall) to buy the confetti-filled newspaper, because, hey, confetti’s expensive. You’re not able to order your newspaper to order. If you could, the analogy would be more valid.

    @Caledonian

    Do you always use deliberate oversimplifications to misrepresent others’ arguments and finish it up with ad homs in your responses? Oh wait…

    See above for a response to your logical but nonsensical retort, or the short version:
    “He deliberately misled me!”
    “Did he put a gun to your head?”
    “No.”
    “Then you made the decision of your own free will?”
    “I guess so.”
    “Then it’s your fault.”
    “WTF?!”

  • constant

    You’re not able to order your newspaper to order. If you could, the analogy would be more valid.

    1) So you’re saying that if the customer is not given the option to buy the individual items, then that’s better than if he is given the option. You’re serious??!! So if we go from a situation in which two options are offered, one of them (by Paul’s assumption) inferior to the other, then if we change this situation so that only the inferior option is offered, then this is an improvement? Really??!!

    2) Sellers often offer both individual items and bundles. You can buy a six-pack or individual cans. You can buy a toolkit or individual tools. You can buy a fruit basket or you can buy individual fruits. And so on. So substitute any of these real examples, which you acknowledge to be “more valid”. Is offering bundles at a slight discount bad? Really??!!

  • http://www.hopeanon.typepad.com Hopefully Anonymous

    Grant, from reading your post, it seems to me that you think it may be true that sometimes coercive approaches, including coercive governmental approaches, yield better results than free market approaches. That’s not reflexive libertarianism, and I think if you fairly read the comments in the economic academic blogosphere, you’ll find commenters that will make no such concession.

    Even still, you seem in my reading to signal that your libertarianism vs. coercivism isn’t strictly limited by empiricism/consequentialism, but rather serves as a belief as cheer/team belief, too. You seem to me to be less interested in empirical exploration of what gives the best results then in being one of the folks who argues for less coercion in a dialectic.

    You’re not alone in that, and it’s an interesting phenomenon to me. I don’t have a handle on why raw empiricism/consequentialism isn’t more salient to folks like you.

    But feel free to enlighten me if you think I’m wrong in any of my analysis about this.

  • http://www.daegmorgan.net Raven Daegmorgan

    Greetings, constant. I don’t understand this desire in the comments section of a discussion blog about rationality and bias to take something someone says, twist it in all sorts of bizarre ways and chop pieces out, then point at the hideous mutation that results and scream: “Lookit what he said! It’s sooooo silly! That’s totally crazy!! Hahaha! I can’t believe you said that!!?! Are you serious?!?!”

    Nor including all sorts of eye-gouging and unnecessary punctuation marks and queries indicating emotionality, and appealing to nothing more than the monkey-social aspects of an argument to ‘win’ via supposed mockery and humiliation of some silly non-point that was never made, except in the virtual cutting room.

    Is OB suddenly a new ‘hidden camera’ show for Fox News?

    However, if you would please rephrase your concerns as a question in the context my critique (of the appropriateness of your analogy) was made, I would be happy to respond cogently to your concerns. Otherwise, I’m afraid I can’t provide any meaningful answers to questions based on inaccurate representations of my position, positions I haven’t even taken, loaded questions, or bemused hysteria.

  • J Thomas

    I’m not going to get into the political discussion, except to note that in J-morality (you all are following Eliezer, right?) attempts to protect people from themselves are ipso facto wrong.

    Isn’t it OK if you teach them how to protect themselves, at a price they’re willing to pay?

    The large majority of people I meet in person or online who self-describe as libertarians are unpleasant and doctrinaire. And — try this — when you meet somebody who says he’s a libertarian, sometime later ask him whether he’s angry at his father. Do it 30 or 40 times and keep track of the numbers. But all that aside, they can still be right sometimes.

    If people sufer consistent biases, how can we possibly keep other people from taking advantage of those biases? Companies tend to evolve marketing strategies, they look at what works better and then improve on it. They increase their bias in favor of techniques that bring in money. I’m guessing that often none of the individuals involved understand the biases they’re exploiting, they’re just stumbling onto things.

    How can you possibly make laws against it that they can understand?

    Far better to teach the victims to be less biased, than to try to protect them from their biases. The nonhuman world is likely to use their biases to hurt them, whenever they stray from the environments where the biases work in their favor.

  • Constant

    However, if you would please rephrase your concerns as a question in the context my critique (of the appropriateness of your analogy) was made, I would be happy to respond cogently to your concerns

    You raised an objection to my analogy. Your objection was that in the case of fast food the customer is offered a choice between bundle and individual items, but in the case of the newspaper the customer is not offered a choice between bundle and individual items. This supposed defect can be easily corrected if McDonald’s and Burger King cease offering individual items and sell only bundles. Now, instead of having the choice between individual items and slightly discounted bundles, customers have no choice.

    Surely this would be strictly worse. Thus:

    Current state of fast food is superior to fast food without individual items, so if the current state warrants a law, then fast food without individual items would warrant a law all the more (possibly a law which forces restaurants to sell individual items).

    Fast food without individual items is analogous to newspaper, which sells only bundles of sections, not all of which people want. If fast food without individual items would warrant a law, then by the same token newspaper would warrant a law (possibly a law which forces papers to sell individual sections).

    My point is quite simple: Paul (and others here) have picked on fast food, pointed out something about fast food, a supposed defect, which defect is reproduced all throughout the economy. The dis-analogy you point out is actually an exacerbation of the problem, so if there is a problem with fast food restaurants then there is all the more a problem with newspapers.

    My best explanation for this special treatment of fast food as defective when the supposed defects in fact exist throughout the economy is that it is cool to spit on fast food, just as it is cool to spit on Walmart.

  • http://drchip.wordpress.com/ retired urologist

    Constant: I find your comment to be *very* insightful. It displays the analytic thinking process that I am trying to sharpen. Thanks.

  • http://uncommon-priors.com Paul Gowder

    I’m in the process of moving, so my follow-up post is going to be delayed, but I feel like I must respond to Constant’s analogy, which is convincing on the surface, but ultimately, misleading (and hence intellectually dangerous).

    So, a quick list of some reasons why fast food and newspapers are disanalagous is in order.

    a) Peoples’ consumption (not economic consumption, as in purchase, but actual use) behavior isn’t as heavily influenced by newspaper bundling as by food bundling. We might *buy* more newspaper than we really want because it’s bundled, but there’s no reason to believe we *read* more newspaper than we really want. On the other hand, when we’re given a large amount of unhealthy food, we tend to eat it all, whether or not we really want it. This is the well-supported empirical regularity of portion size effects (one of the biases mentioned in the original post). This means that the cost to the consumer of food bundling is steeper than the cost of newspaper bundling, and it’s a cost in the form of obesity, heart disease, etc.

    b) In one major sense, newspaper content isn’t bundled. Most of the cost to the consumer of a newspaper and revenue for the publisher isn’t in the (di minimis) price for buying the paper, it’s in the reading of advertisements. If I buy a whole paper and only read the sports section, not only do I not consume the other sections, I don’t “pay” for that section by having my time and attention wasted on advertisements.

    c) Fast food may warrant a law with or without bundling. This is because fast food is an inherently harmful product (that is, it is ok to pick on fast food), at least relative to other, healthier, food options. The point of bundling with fast food is that it makes a bad thing even worse, because it causes people to consume more of the bad thing. Thus, it makes it more likely that a law is justified. By contrast, newspaper bundling does not make a bad thing even worse. Newspapers generally have fewer harmful and more beneficial effects than fast food for everyone except religious fanatics.

    That being said, I do think there is some vestigial objectionable quality to bundling in general, to the extent that it does affect consumer choices — that is, to the extent that consumers will buy bundled items that they wouldn’t buy a la carte for the same total price in cases where there are low or zero transaction costs to the consumer for buying the items a la carte. If that’s the case then we’ve eliminated the rational bundle-buying reasons, and what’s going on is consumer irrationality, being exploited. Surely this is a bad thing.

    In some cases, as in the newspaper case, bundling is defensible because non-bundled items are probably not economically viable because, e.g., of economies of scale in production, etc., and hence the consumer couldn’t get the items were they not bundled. That, I think, is another place Constant goes wrong: the availability of individual items does indirectly make bundling worse, because it proves that individual items are economically viable, and thus eliminates one of the justifications for bundling in general.

    More generally, I think bundling in general is defensible because it just isn’t that costly to consumers, and, if it is costly in particular cases, we can rely on the market to supply non-bundled alternatives where possible. But I’d suggest that the health costs of fast food, plus the biases (noted in the original post) that make it difficult for consumers to respond appropriately to those costs by declining to purchase bundles (and hence permit market failures), make that defense unavailable to the fast food industry.

    This comment came out a lot longer than intended, but I hope it answers at least some of the libertarian objections.

  • Constant

    Constant’s analogy, which is convincing on the surface, but ultimately, misleading (and hence intellectually dangerous).

    Yup. That’s me in a nutshell. I’m also a hidden camera show for Fox News.

  • Sebastian

    “I fell for this kind of stupidity even though I know the research. Do you?”

    No.

    And I think I know why. I was poor enough at one point to have actually gone through the math. Most likely for you, the $1 difference isn’t a big deal.

    But look at all the biases exhibited in your post:

    A) That a large number of people really don’t want all of the items.

    You don’t. Where did you get the idea that most people dont? The ‘value meal’ label isn’t even misleading if people typically do want all of the items.

    B) That a large number of people are ‘fooled’ by this.

    First it presupposes A). Second you aren’t looking at incentives. You are well trained, but was the money involved consequential to you? If not, perhaps you just didn’t spend the small amount of time to figure it out.

  • http://zbooks.blogspot.com Zubon

    Paul, are you contributing to the trend some commenters suspect of posts that undermine themselves intentionally to see if people catch them? That comment seems to grant the libertarian objections.

    Setting aside that you have declared a Happy Meal to be a market failure, setting aside that you say you regularly and intentionally buy something you consider “an inherently harmful product,” we have two items in that next-to-last paragraph.

    First, you speak of the fast food industry as something that needs defense. They are offering to sell people hamburgers and tacos. If the practice of selling commonly consumed foods is something that must be defended, you are postulating a society far more authoritarian than your libertarian critics.

    Second, it is difficult for consumers to decline to purchase bundles? How seriously do you want us to take that statement? It seems to be the heart of the argument, and the more clearly it is phrased, the more it seems that you must be making either a trivial argument at the margin or a ridiculous argument in general. Either the effect is very small, as it would seem to be if the act of adding three numbers defeats it, or your audience is filled with people who daily commit Herculean acts of willpower. I regularly make unbundled food purchases, even when the bundle is encouraged. I can even overeat without a bundle-based nudging.

    You have begun arguments with the following contentions: fast food is inherently harmful; you regularly buy fast food; you know the marketing of bundles and the science of mindless eating; you regularly buy combo meals; you have made dozens if not hundreds of purchases without it striking you to see if that was your lowest-cost option, worth it, or even wanted. Why would we then trust your judgment about policy proposals in this arena?

  • http://www.daegmorgan.net Raven Daegmorgan

    @Constant
    Thanks for the clean reply! I pointed out your analogy as flawed given that fast food items and newspapers are simply not similar in any but the most superficial way. Especially as you had exploited that small similarity to build an argument around the clear irrationality of dismantling newspapers or of selling food by ingredient, insinuating that doing so would be nonsensical and that one must follow from the other: that the suggestion regarding oversight of product bundling was silly because you wouldn’t do that to a newspaper/where would it stop, and that it would end badly.

    Unfortunately, this is simply a logical slippery slope and thus fallacious rationality.

    As mentioned before, there is an understood and clear difference between passing yourself off as someone you aren’t in order to spy on and emotionally manipulate/injure someone by exploiting the foibles of human nature to alter their judgement and response (for example, the Megan Meiers case), and your wife using the same to make you feel like an ass for giving weird Uncle Henry the cold shoulder at the family get together. I bring up this seemingly unconnected idea because the type of counterargument you chose in making the above counter would be akin to arguing that “you can’t legislate manipulation because then either all cons are just fine or all social manipulation is wrong”.

    Your argument itself is a fallacy, as your argument is “either X or Y” — a black and white claim — when there is clearly a significant gray area involving acceptable and unacceptable manipulation, and rational and irrational ways to deal with such, including legislation that makes some forms of the behavior illegal while not creating a ridiculous police-state situation.

    Similarly, arguing that newspapers need to be dismantled into sections or stories because fast food bundles utilize some well-understood presentation tricks to get you to purchase without consideration and that behavior might be corrected, as an argument, is missing both this sort of perspective and scale.

    So newspapers and fast food is apples and oranges: one obvious difference being that newspapers aren’t trying to get you to “buy more” instead, or relying on presentational grouping or social-linguistic cues to influence your perception of what it is you are buying and the value of such (ie: suggesting the items are a “meal” and presenting them as such to increase profit via suggestion of the nature of what is being purchased, when a burger alone could be a “meal”, and given the detrimental nature of both the consumerism the “meal” inspires and the impact on the physical health of a society caused by such).

    Paul goes into most of this and more in his own response, so I won’t reiterate.

    The point was: the analogy upon which your argument rests was false, which did not necessarily invalidate your points as such, but the false dilemma you proposed in the argument stemming from that analogy did.

  • http://zbooks.blogspot.com Zubon

    Adding a data point:
    I bought a combo meal at Burger King today. The receipt had the combo meal discount printed on it ($0.85). I submit that normal market forces can bring information to consumers who have difficulty remembering to add three numbers.

    (The combo meal discount was static, no matter what size of combo you order. That is, you could increase the fries and soda by one size for $0.50 or two for $1.00. The non-combo cost of a large fry+large soda is $0.50 more than the medium, and the king-sized (or whatever they call it) is another $0.50. I did not test whether I could increase the size of the fries without increasing the size of the soda and still get the combo discount. Based on the receipt, that seems possible.)