Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Defaults to the Cheapest Option
In this episode of Behavioral Economics with Fexingo, Lucas and Luna explore why consumers consistently choose the lowest-priced option even when it's not the best value. They dive into the psychology of price anchoring and the 'extremeness aversion' bias, using the example of a 2012 study on microwave ovens where shoppers overwhelmingly picked the middle option when given three choices—but defaulted to the cheapest when only two were presented. The hosts discuss how retailers exploit this tendency with 'decoy' pricing, from movie popcorn sizes to subscription tiers…
The skinny
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