MyMediaMusings

There is a really cool piece over on TechDirt about a series of experiments designed to look at the effect of “free”

“Ariely discusses an experiment he ran with children at Halloween. He first gave them all three Hershey kisses. Then he held up two Snickers bars — one tiny one and one large one. He offered to trade them the small one for one kiss and the large one for two kisses. Most kids quickly made the trade for the larger Snickers bar — which is a perfectly rational move.

He then changed the terms of the experiment. He offered to give kids the small Snickers bar for “free” or the large one for one Hershey kiss. Most kids now took the free small Snickers bar — even though they are worse off in that case. Having two Hersheys kisses and the big Snickers bar providers more chocolate than three kisses and the small bar — but the impact of “free” got them even more interested. Ariely ran more similar experiments (economist Tyler Cowen wrote about one recently) and found that again and again people overpay for free. “

This is another fantastic example of the ways in which all of our long-held beliefs about marketing, sales, advertising and the economy are coming into question.  And for good reason.  It’s not that we are suddenly responding differently to the idea of “free” but that what can be made free and how that can be incorporated into new schemes is growing rapidly.