Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats Free as Irresistible
In this episode of Behavioral Economics with Fexingo, Lucas and Luna dive into the zero-price effect—why we overwhelmingly choose free items even when the alternative is a better deal. Using a classic 2007 study by Kristina Shampan'er and Dan Ariely, they explore how a free $10 Amazon gift card beats a $7 one costing a cent, and how free shipping influences billions in e-commerce. The hosts also unpack real-world cases like Spotify's free tier, newspaper paywalls, and the 'free' strategy behind Gillette razors. They discuss why our brains perceive zero as emotionally…
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