We come from the future
We come from the future

Proof That We Never Really Know a Bargain When We See One

We've all been taken in by "bargains" in a supermarket that sell us more stuff than we can possibly use by giving us a bargain price on bulk food. When it comes to real life issues, we do exactly the opposite. Offer us the bargain of a lifetime, and we just don't take it.

How much would you pay to save 2,000 sad, oily birds from death? How much would you pay to save 20,000 birds of equal sadness and oleaginousness? How about 200,000? According to one study, your preferred amounts are \$80, \$78, and \$88 respectively. (Perhaps more if you saw pictures of the birds while a Sarah McLachlan song was playing.)

You'll notice something strange there. First of all, people will only pay about \$8 more to save 198,000 more birds. More importantly, judging by the \$80 and the \$78, it looks like people are actually willing to pay money to kill 18,000 birds. We wouldn't pay as much to save many birds as we would to save a few.

This phenomenon is called "scope neglect" or "scope insensitivity." Sometimes the degree to which people value the solution to a problem is unrelated to its size. Scope neglect may spring from the fact that, unlike everyday objects, we don't have a frame of reference for things like saving birds or protecting wildlife areas. (In one survey, people would pay only 28% more to save 57 wildlife areas than they would pay to save one wildlife area.) Instead of thinking about the amount of damage we could prevent, we simply think of a oily bird, and consider what its life is worth to us. We come up with a figure of "around 80 dollars" and apply it, no matter how many birds we are actually saving. We think of a pristine wilderness area, and consider how much money we'd pay to keep it from being despoiled. That's the rough figure we pay, no matter how many wilderness areas we can save.

So how do we change that? When it comes to issues outside a person's experience, we probably don't. We can't make people understand, or accurately value, things that they don't have any experience with. If people base their charity on emotional, rather than rational, appeal, there is only so much their emotions will let them pay. If we want people to dish out proportionate sums, we either have to tie their donation in to a practical benefit, or give them a better idea of how much money different sized problems require.

[Via Heuristics and Biases.]