Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
The Compromise Effect Why We Pick the Middle Option
Episode 70 of Behavioral Economics with Fexingo digs into the compromise effect: why consumers consistently choose the mid-priced option, even when it makes no rational sense. Lucas and Luna explore a classic 1992 study by Simonson and Tversky involving microwave ovens, then connect it to modern examples like subscription tiers and car models. They unpack the psychological mechanism — extremeness aversion — and why your brain treats the middle as the safe default. Listeners learn how marketers use this bias to nudge them toward higher-margin items, and how awareness alone can shift spending…
The skinny
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