Source: WikiMedia Commons

High on Design, Buyers Ignore Economics

Growing up, I was taught not to judge a book by its cover. Clearly, that doesn’t quite apply to the economic decisions we make today.

To prove that appearance or design plays a more important role in influencing buying decisions than economic factors like price do, I conducted an experiment in behavioral economics, loosely based on Dan Ariely’s book Predictably Irrational.

Ariely talks about how expectations shape economic decisions in his chapter ‘The Effect of Expectations’. He emphasizes on how presentation sets expectation by giving the example of fancy wine glasses and their impact on perception of taste. Ariely believes that during a blind tasting, wine served fancy and ‘correct’ wine glasses is perceived to have a significantly different taste even though controlled studies have shown that the shape of the glass does not matter in a blind tasting.

Glass 1 on the left, Glass 2 on the right

To test this theory about appearances setting expectations that in turn drive economic decisions, I took two shot glasses that obviously had a similar function but differed greatly in their appearance. Glass 1 was a souvenir shot glass from Grand Canyon, Arizona that was tall and covered with intricate design. Glass 2 was a short, wide, and clear glass with a Korean motif on its front.

With the shot glasses and a dashing model in tow, I reached a place where I knew I’d get a good response to questions about shot glasses on a dull Monday evening — the square outside NYU’s Stern School of Business. I interviewed 22 people, equally divided among men and women and with ages varying between early 20s to mid 40s.

Each person was asked to name a price for both shot glasses, pick one they’d like to buy and state the reason why they picked a particular glass.

A little less than half the people priced Glass 1 higher, almost 33 per cent people thought Glass 2 was more expensive, and nearly 23 per cent said both glasses had the same price.

Overall, close to 73 per cent people said they’d pick Glass 2 if they had to buy one of the two glasses.

Economics 101- price and demand have an inverse relationship. Since more number of people thought Glass 1 was more expensive, so more number of people said they’d buy Glass 2. Simple isn’t it?

Apparently not.

Strangely, almost 91 per cent of all people interviewed admitted that design influenced their decision to select one glass over the other, instead of price, quality or even size.

Only four respondents asked to touch the glasses to assess their quality before they named a price or picked a glass. Only one respondent picked a glass because he felt there was a difference in sizes.

What is even more surprising is that, per cent of those who priced the glasses differently actually chose to buy the glass they priced higher.

These results definitely cross into the territory of irrational decision making. But are they predictable? Evidently, they are.

Dutch academics Mariëlle E.H. Creusen and Jan P.L. Schoormans, in a study called The Different Roles of Product Appearance in Consumer Choice, found that, “when product alternatives are similar in functioning and price, consumers will prefer the one that appeals the most to them aesthetically.”

Most people who preferred Glass 2, liked it for its simple and minimalistic design. Some even volunteered a further explanation, calling it “classy”. One respondent who made the choice in favor of Glass 2 admitted he did so because he found Glass 1 “tacky.”

Similarly, a respondent who opted for Glass 1, did so because he found the design on Glass2 “weird.”

This experiment proves that our eyes sway our buying decisions more than the rationality in our heads, confirming Ariely’s theory about the correlation between appearances, expectations and decision making. We pay more for artfully plated dishes at fancy restaurants or phones that are visually so stunning that they dwarf other ordinary phones and are ‘more’ than just phones. (Sorry Apple loyalists!) While we’d like to think of ourselves as rational consumers, in reality, not only are we irrational, but are predictably so. Cheers!