Published in the San Diego Union-Tribune, May 1, 2023
by Neil Senturia
Turn on the radio, television, Internet, social media or a lunar landing and within a few minutes you will hear the word “free.” Let’s agree that from both a metaphysical standpoint, as well as a close reading of the second law of thermodynamics, it is impossible for something to be free.
The second law states that entropy always increases with time and that things can’t be undone after they are done, and that natural processes tend to go in only one direction, toward less usable energy and more disorder.
You do not have to look too far to find disorder. Just pick up the morning paper. And I assure you that when you get to lunch, it will not be free. The real question is why do we do such a good job of making bad decisions? If the cost of every decision is at least greater than zero, then the core challenge is to properly assess the risk-reward outcome.
Professors Joshua Schwartzstein, Harvard, and Benjamin Handel, Berkeley, have done research on “why consumers make regrettable decisions every day,” even though better information is available.
For example, in an article for Harvard Business School:
• “26 percent of consumers choose Advil (or a similar brand name), instead of the cheaper generic, ibuprofen.”
• “A middle-aged man needs to take heart medication, which he will gladly take with no copay, but with a copay requirement, there is much less adoption,” even though the drug will help keep him alive.
I personally take a statin. Herewith a summary of a discussion with my doctor. “I am willing to take it three times per week.”
“You need to take it seven days per week.”
“I don’t want to.”
“OK, you’re an idiot. When you are on your death bed with a heart attack and you are going to die, are you going to sit up in bed and with your last breath say, ‘You know, doc, you were right, should have taken them all seven days?’”
Bad decisions are costliest in the areas of the big three — money, health and career. (Maybe put marriage in there). Schwartzstein and Handel say that there are two main reasons for bad choices: “frictions” and “mental gaps.”
The mental-gap problem is “because consumers are not aware that choice exists,” the researchers say. I am suspect of this argument. If anything, I am daily overwhelmed with having to make a choice. That is the premise behind advertising. There are 13 kinds of granola in the store, there are more than 60 major automotive brands. Choice — thy name is yikes, don’t make me pick.
The professors explain the friction issue with the default explanation. “Too many things going on in my life, so I pick the path of least resistance.” Think about that insidious device that takes your credit card and picks a tip for you starting at 25 percent. Grrr, but if I have to look for the custom box and then do a calculation, and the server is looking at me and tapping their foot, oh, the hell with it, and I push the button.
Let’s go back to free and cost. Why is it that drug dealers give you the first hit at no charge?
Choice and manipulation — why do pharmaceutical companies advertise on the evening news? They show me a picture of a happy couple in the park with their kids and everyone smiling, while they tell me that the drug being discussed has 23 side effects and could kill me. Then they tell me to “call your doctor.”
Let me ask you, how many people call their doctor and have any reasonable expectation that the doctor will call them back? Hah. The drug companies say that the advertising during the evening news helps patients “raise disease awareness.” You think I am going to call my doctor and tell him that he should prescribe for me what I just saw on television? Madness.
Freemium is a proven business model for app developers. You get a basic package for free, and then you get worked over for upgrades, which you pay for. If you try to cancel after you have given them your credit card, well Dante described the nine concentric circles of hell, and I think he is still trying to cancel his Netflix subscription.
Rule No. 758: And shipping is free.