Everyone wants free stuff. It doesn’t matter what the consequences of getting that would be, if it’s "free" we’ll kick, scratch, or even kill for that gratuitous item. But the thing is, the psychology behind it is completely irrational whereas the economics of "free" deals are actually as detrimental to the consumer as it is profitable to the retailer. But retailers and marketers know this and so they prey on our hapless desire to get "free" stuff for their own gain. What makes the label "free" so appealing to consumers is just the fact that we think it wouldn’t cost us anything, but in reality, we don’t exactly get what we bargained for.
When confronted with a purchasing choice, we typically run a quick internal cost-benefit analysis, weighing potential satisfaction/joy against price.
But Ariely concluded that when the word ‘free’ is introduced, it not only decreases the cost but makes us believe the benefits of the free item are higher. Suddenly, that mediocre Hershey’s Kiss is the finest chocolate known to mankind.
As a result, we fall victim to the zero price effect, a phenomenon whereby our demand for an item dramatically increases when it is free.
(Image credit: Zachary Crockett/The Hustle)