Saturday, 1 February 2014

Half of two scoops doesn't equal one scoop of ice cream

My wife and I went out for breakfast this morning and ordered pancakes.  Ricotta pancakes with banana and maple syrup to be exact. Quite decadent for breakfast, but it is Sunday, and what the heck, let's add ice cream, but we will share a scoop.

The meals arrived and there wasn't one scoop of ice cream, but two scoops.

Reference dependence in ice cream

Initially, our reference point was one be divided.
In fact, there are two reference points here:

  • One scoop of ice cream
  • One half of the ice cream each

One of our reference points has now changed. Which will we remain dependent on?

Clearly, the result of this breakfast experiment is that we remained bound to the second reference point. We simply divided the ice cream that was delivered.

Three scoops?

The first case meant that one of our reference points had been breached, but only by a relatively small amount, that is doubled from one scoop to two scoops. Our automatic system seemed to cope seamlessly with this problem!

On the other hand, what would happen if we were served three scoops, or four scoops?

Do we still take half of the ice cream, keeping the other reference point in tact? When do we get to the point where the original references are so badly breached that they no longer serve a useful purpose?

If we had been served six scoops, rather than one, there is no doubt that our original reference points would be discarded. At that moment, we would adopt a different approach entirely. We might only take a small spoon of ice cream. We might take one scoop; or two scoops ... or four scoops. Initial bets would be off, and now we would be bound by a different set of heuristics, and social norms, depending on the context.

The reference point of abundance - the supply-side factor

This example of more and more as a reference point is often seen in food retailing. As a general rule, a shop that displays mountains of sandwiches will encourage more purchasing that a shop which displays only a few.

A sale with hundreds (or thousands) of items of knickers, bras, shirts and ties available encourages a greater volume of purchasing than a sale where fewer items are on display.

So, you do need to understand the reference point of your customer/friend/associate, but also be aware that it can be "broken" if you move the environment far enough.

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