Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats Free Shipping as a Discount
Free shipping seems like a straightforward perk, but behavioral economics reveals it hijacks our perception of value in surprising ways. In this episode, Lucas and Luna explore the 'shipping separability' effect — how splitting a purchase into product price plus shipping fee changes what we're willing to pay. They cite a 2020 Journal of Consumer Research study showing that consumers perceive a $50 item with free shipping as cheaper than the same item priced at $45 with $5 shipping, even though the total is identical. They also discuss how Amazon's 'free shipping above…
The skinny
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