Flashback – Price Deception

[On New Year’s Eve 2012 I posted a look at the various ways advertisers use prices to convey a false impression. Make prices appear low to suggest a bargain; jack them up to give the impression of special quality or luxury items. Because of the date, I ended with a brief note on champagne. Though it’s only June, why not read this and then find something to celebrate?]

We are deceived by a lot of things, by ourselves and by others, especially advertisers. We are all familiar with the pricing scheme of marking items as $19.99 instead of $20 to make them seem like a bargain, even though many people, when asked, will describe the $19.99 shirt as a $20 shirt.  Consciously we are not fooled, but subconsciously it registers as a better deal. Consider that  nine-tenths of a penny per gallon on the price of gasoline.

Surprisingly, the opposite strategy is also used. When paying a higher price, we often believe we are buying better quality even when we are really getting substantially the same thing. In prior postings I brought your attention to tests of (more expensive) organic foods showing that they are not nutritionally superior. Recently we learned that family cars outperformed luxury cars in the new crash tests. I have seen many Consumers Digest-type articles saying that ordinary moisturizers help your skin as well as the high-priced brands that claim to be superior. Higher-priced brand name drugs continue to sell well against similar or even identical generics by virtue of perceived quality. “When served microwaved food from the frozen food section in the setting of a fine restaurant, most people never notice.”

I remembered some time ago seeing a story about wine judging. Experts were asked to rate a certain group of wines. Later, in what they thought was a different event, they were presented with the same wines. The ratings of the same wines by the same judges came out completely different – no correlation whatsoever. I couldn’t find that source, but was overwhelmed by similar stories.  One told of wine tasting experts fooled in general, recommending wines with expensive labels with eloquent descriptions of their superiority over the same wine poured out of an different bottle. Experts also gave differing descriptions when served a white wine and the same wine with red food coloring added. Others couldn’t tell if a wine was red or white when they drank them from black-colored glasses.

It’s not only the experts who are fooled. “Expensive wine is like anything else that is expensive, the expectation it will taste better actually makes it taste better.” This article gave even more examples.  HDTV clarity and cheese tasting elicited the same perception errors based on price. A January 2008 study showed that adults rated the same wine as tasting better when it came from bottles labeled $45 than from ones labeled $5.

How would this apply to the art world? Experts always want to tell us what to think and what is real art. We often look at the work and scratch our heads. Here is a comment from a friend who visited an exhibition of what was proclaimed to be a major contemporary British artist at the Aberdeen (Scotland) Art Museum. “Imagine a giant empty exhibit hall with nearly-blank canvases, each about 7 feet square, or painted unevenly in reddish-orange oil. A life-size bronze casting of a rumpled sleeping bag.” I'm sure most of us would be equally puzzled at the praise for such an exhibit, but in the art world there is so much hype, and it’s so easy for the experts to pompously fall back on the accusation that others "just don’t get it." We buy that logic and that’s why we get what we get. (For an amusing spoof on contemporary art check out a film called Untitled).)

The effects of high price and over-reliance on so-called experts apply in many other fields. So before you buy something based on the name or the price, do the research. Whether it’s food, art, drugs, wine, cosmetics or cars, more expensive is not necessarily better. When all you have to go on is expert opinion rather than evidence, you are usually safe to trust your own taste.

Which brings us to the real topic for today – champagne. It is, after all, New Year’s Eve.  In this case I have done the research for you, and guess what?  More expensive is not necessarily better. As this British source says, “In a blind test that has thrilled the marketing departments of the major retailers and perturbed at least one of the grande marques, six wine experts gave a resounding vote of support to some of the less glamorous bottles.”

So buy what you like and save a little cash. Happy Critical Thinking in the New Year [or Independence Day], and Cheers!

Who's in Control?

Why do we let other people control our lives, telling us what to do and when to do it?  This question came to mind as I watched a CBS This Morning segment a few days ago reporting how retailers are “price gouging” on Valentine’s Day sales, apparently forcing people to, or at least tricking them into spending an average of $147 this year.  "We're going to spend $20 billion on Valentine's. That's up from $19 billion last year." (Yet we hear of so many people owing tens of thousands in college loan debt and so many others with virtually no retirement savings.)

If that isn’t crazy enough, the story goes on to tell how prices of traditional gifts like flowers, candy, champagne and dinner for two have, in some places, doubled in the past week, with the price of red roses rising three to five fold.  Then they give a list of prices (obviously big-city prices) for the various items.  Fifty dollars for a bottle of champagne?! – For the inside information on the real difference between an expensive bottle and more reasonably priced champagne, see my article from New Year’s Eve 2012.  Hint: no real difference.

The bottom line in the opinion of their expert:  "Men hate it because they feel obligated to top themselves. ... Women hate it because they always hate the gifts they get or, somehow it wasn't up to their expectations. So nobody's happy."  Well, that outcome is surely worth an average of $147!  Get some perspective, people!

It seems to me that the whole concept of Valentines Day, contrived or not, is about relationships; and the bedrock of any solid relationship is the willingness to compromise.  The simple fact is that nobody is holding a gun to your head telling you what you must do for this particular "holiday."  The only wishes or opinions that count are yours and those of your partner in the relationship.  And those wishes should be negotiable.

Why don’t more people take the time to discuss options instead of relying on assumptions about a loved one's expectations, expectations that may be driven by the pressure from society and advertising?  That is a reactive, not a deliberate, approach.  You do have options.  You could ignore Valentine’s Day completely.  You could celebrate it on a different day, before or after retailers have manipulated prices to deceive those among us who muddle through life in a trance, letting other people make the rules for them.  You could give a non-traditional gift.  (I bought my wife a new yoga mat for Valentine's Day, and she was very pleased; because it was exactly what she wanted, and it was on sale, not marked up.)  Is it in any way unreasonable to suggest and discuss a different type of gift or different timing?  Military families, for example, often have to move holidays and special occasions to a more convenient time rather than a specific day on the calendar.

The most important thing is to find a solution that fits your individual relationship, not one dictated by outsiders that, as shown above, often leaves people frustrated and angry, and that gives some unscrupulous retailers another opportunity to rip us off.  It may be too late for this year, but next year get some perspective and take back some control.  You can’t be price-gouged without your permission.

Happy New Year

Every year around this time, it seems I run into a story about champagne.  I don’t think it is a coincidence.

In 2012 I wrote about price deception, how the expensive bottles are not significantly better than those of average price.

In 2013 I told of people with unusual perspective who pay outrageous sums, collect and hoard bottles of “rare” vintage.

So in keeping with what has become a tradition, almost – what was I thinking last year? – here is another sample of bubbly news.

From a 2013 study: “Scientists at Reading University say that a regular dose of bubbles can help in the fight against brain disorders such as Alzheimer’s and dementia.”  They did some experiments on rats.  “The rats that had no Champagne had a 50% success rate [rerunning a maze], but this went up to 70% in the rats that had Champagne in their diet.”  At the time they were looking for volunteers to participate in the three-year study to see if humans would experience similar benefits.  Critical thinkers would not be surprised at the last sentence pointing out that it was the first time such a link was found and that a lot more research is needed.

Another posting, undated unfortunately, list half a dozen benefits of champagne from an ingredient in a skin treatment to a surefire way to improve your mood – they don’t seem to be too embarrassed to state the obvious.  It also features health benefits from a study at (you guessed it!) Reading University.  “Champagne and other sparkling wines can reduce your risk of heart attack and stroke because the polyphenols (plant chemicals with antioxidant properties) in bubbly help lower your blood pressure.”  Again further study is probably needed.

So that’s the reminder of the day from a big champagne fan.  Now, if you’ll excuse me, I am going to spend the rest of the day filling out a job application to work at Reading University.

Price Deception

We are deceived by a lot of things, by ourselves and by others, especially advertisers.  We are all familiar with the pricing scheme of marking items as $19.99 instead of $20 to make them seem like a bargain, even though many people, when asked, will describe the $19.99 shirt as a $20 shirt.  Consciously we are not fooled, but subconsciously it registers as a better deal.  Consider that  nine-tenths of a penny per gallon on the price of gasoline.

Surprisingly, the opposite strategy is also used.  When paying a higher price, we often believe we are buying better quality even when we are really getting substantially the same thing.  In prior postings I brought your attention to tests of (more expensive) organic foods showing that they are not nutritionally superior.  Recently we learned that family cars outperformed luxury cars in the new crash tests.  I have seen many Consumers Digest-type articles saying that ordinary moisturizers help your skin as well as the high-priced brands that claim to be superior.  Higher-priced brand name drugs continue to sell well against similar or even identical generics by virtue of perceived quality.  “When presented microwaved food from the frozen food section in the setting of a fine restaurant, most people never notice.”

I remembered some time ago seeing a story about wine judging.  Experts were asked to rate a certain group of wines.  Later, in what they thought was a different event, they were presented with the same wines.  The ratings of the same wines by the same judges came out completely different – no correlation whatsoever.  I couldn’t find that source, but was overwhelmed by similar stories.  One told of wine tasting experts fooled in general, recommending wines with expensive labels with eloquent descriptions of their superiority over the same wine poured out of an different bottle.  Experts also gave differing descriptions when served a white wine and the same wine with red food coloring added.  Others couldn’t tell if a wine was red or white when they drank them from black-colored glasses.

It’s not only the experts who are fooled.  “Expensive wine is like anything else that is expensive, the expectation it will taste better actually makes it taste better.”  This article gave even more examples.  HDTV clarity and cheese tasting elicited the same perceptive errors based on price.  A January 2008 study showed that adults rated the same wine as tasting better when it came from bottles labeled $45 than from ones labeled $5.

How would this apply to the art world?  Experts always want to tell us what to think and what is real art.  We often look at the work and scratch our heads.  Here is a comment from a friend who visited an exhibition of what was proclaimed to be a major contemporary British artist at the Aberdeen (Scotland) Art Museum.  “Imagine a giant empty exhibit hall with nearly-blank canvases, each about 7 feet square, or painted unevenly in reddish-orange oil. A life-size bronze casting of a rumpled sleeping bag.”  I'm sure most of us would be equally puzzled at the praise for such an exhibit, but in the art world there is so much hype, and it’s so easy for the experts to pompously fall back on the accusation that others "just don’t get it."  We buy that logic and that’s why we get what we get.  (For an amusing spoof on contemporary art check out a film called Untitled).)

The effects of high price and over-reliance on so-called experts apply in many other fields.  So before you buy something based on the name or the price, do the research.  Whether it’s food, art, drugs, wine, cosmetics or cars, more expensive is not necessarily better.  When all you have to go on is expert opinion rather than evidence, you are usually safe to trust your own taste.

Which brings us to the real topic for today – champagne.  It is, after all, New Year’s Eve.  In this case I have done the research for you, and guess what?  More expensive is not necessarily better.  As this British source says, “In a blind test that has thrilled the marketing departments of the major retailers and perturbed at least one of the grande marques, six wine experts gave a resounding vote of support to some of the less glamorous bottles.”  Here's a short, light-hearted video with the same conclusion. 

So buy what you like and save a little cash.  Happy Critical Thinking in the New Year, and Cheers!