Trance Logic of Higher Price

Here’s a little secret about my trance logic. Don’t tell anyone. I grew up with an irrational family. In fact, I recognised how irrational a lot of adults were as I grew up – especially my teachers. My friends and a lot of other school mates were also irrational because they wanted to emulate the adults.

I’m pretty sure that I was also infected by that irrational bug; as you understand, it’s not a question of if, but in how many ways. My trance logic tells me that I can teach you something; that’s why you’re here.

I tried to combat what seems like irrational behavior in the past. In the process, I have sacrificed social status and relationships. I have learned that it’s better to go with the flow of irrationality in culture in order to survive rather than try to change the predominant mind patterns around me, so I end up teaching people how great they are.

What I didn’t know (and what your social studies professor did not want you to know) is that there is a new branch of research that is actually studying irrational thinking – and even more interesting is that . . .

The research is mounting that our irrational choices are actually predictable.

This revelation has significant impact because some of this new knowledge about human thinking and behavior is being used to manipulate you. Often it’s used to direct you into making decisions that are not in your best interest. So I think knowing more about this is essential.

Thankfully, Dan Ariely, a professor at Duke University, just wrote a book summarizing the latest research in this field (behavioral economics). His book, Predictably Irrational, is a must-read. You can get it at Amazon or any other bookseller.

The research: price affects athletic performance

Here is one study Professor Dan did on physical stamina:

Dan’s team stationed themselves at the university gym. They offered an energy drink to student exercisers. The drink claims to “elevate your game.” To one group, they charged the regular price for the drink. To the other, the researchers marked the drink down to 1/3 of the regular price.

After the students exercised, the researchers asked the students if they felt more or less fatigued than they normally did after a workout.

Both groups of students said they felt less fatigued than normal.

But, get this. The students who drank the higher-priced version of the drink felt less fatigue than the group that paid 1/3 the price! This is a weird variation of the placebo effect. The students are obviously going by the judgemental heuristic that if it’s a high price, then it must be good.

(If it was me, and a market research group wanted to make me their guinea pig, I would want it for free – but don’t tell anyone…)

The research: price affects mental performance

The exercise test was based on self-reporting. Here’s a study on mental agility:

To validate the results, the researchers did the same experiment in a different setting. They gave two groups of students anagram puzzles to solve. One group did the anagrams after drinking the full-priced energy drink, while the other group had drunk the discounted energy drink.

In this case, the group that drank the higher-priced drink (remember: it’s the same drink!) scored 28% higher on the anagram tests. Does that seem crazy? (What may sound crazier still is something that I said in an article a while back. I’d like to reiterate it: We are all in a trance state; that trance, whether positive or negative, influences our performance in real life. You can read more about this phenomenon in Constructs of Belief.)

There are more studies, but I’m not going to cite any more intellectual property from Dan’s research. I recommend you read Predictably Irrational if you’re interested.

What this means to you

The point is that it’s not rational for a lower price on an identical product to lower the results of the product, but there is overwhelming evidence that it does. It is a predictably irrational behavior.

The mechanism here seems to be that the lower price lowers “expectancy,” which in turn reduces the placebo effect. Volumes could be written about the placebo effect, and the power of belief to create tangible results in performance and healing (both positive and negative trance logic).

Now you know what’s going on when you see those junk mail ads for weak nutritional supplements at ridiculously high prices, yet the literature touts it as the greatest thing since the fountain of youth.

Those advertisers know exactly what they’re doing; they’re taking advantage of your trance logic.

What about that circuit exercise machine that’s been in magazines for years? Have you seen it? It’s always advertised at around $14, 600? In fact, the materials and workmanship make it look like a maximum of around $2000. But the rational in the ad is fascinating: The rational is that you’re going to be sold on it later if not now, then you’re going to sell it to your friends, and so on and so forth.

You know why that machine works so well? Because at $14,600 it better work! You can believe that after that major investment that a person is going to set aside at least four minutes a day for vigorous exercise. The machine itself isn’t that much better than the most expensive bowflex system, but the higher price forces purchasers to use it – out of obligation. The trance logic is, “At that price, it MUST WORK!

Would four minutes of vigorous exercise a day without that machine produce the same results? If your mind pattern and trance logic tells you that you are going to be in shape doing a vigorous set of squat thrusts, pull ups, and jump rope, then YES.

Ask any pro athlete; they do functional exercises according to their discipline which has little to do with the “ROM.” On the other hand, if you’re a CEO of a big company with little time on your hands, then it kind of makes sense; this must be the market. (I just can’t see the average blue collar going deep into hock for the “ROM” because they don’t get enough exercise.)
The relationship between the placebo effect, judgemental heuristics, and the trance state is even more interesting and open-ended. But let’s end here for now.

Hopefully you’ll get time to read Professor Dan’s, Predictably Irrational.

Have a great weekend.

Sincerely,

Randolph, Medicine Man at HealingMindN

P.S. The price of oil, thus, the gas we get at the pumps is the biggest, most obvious example of irrational behavior affecting price. The economic analysts at Elliot Wave International blame the prices, not on lack of oil, but on “Fearful, bullish moods by investors:”

Crude oil rallied to a new all-time high on Friday, July 11 – $147.27 a barrel, intraday. But glance at the headlines, and it’s hard to call the reasons analysts cite as the cause for the $5-rally as bullish news. It all boils down to “tensions between Iran and the West and worries about supply” – same old “concerns” that have been with us for months…

Read the rest of this article at $147 Oil: What Is Driving Up Prices?

BTW: Once you learn how to control your own reality, all that irrational trance logic goes out the window:


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