WAS NEVER THERE TO BE CHOSEN

@hidden_facts82

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The Psychology of Money

The Sunday Times Number One Bestseller.Over 10 million copies sold around the world.The original book from Morgan Housel, the New York Times and Sunday Times be

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Why it worked

The video effectively uses a relatable, everyday example (Starbucks pricing) to illustrate a psychological concept (the decoy effect), making it easy for viewers to understand and apply the information to their own lives.

Summary

This animated video explains the decoy effect, using Starbucks' coffee pricing as an example. It shows how offering a medium size at a price close to the large size encourages customers to buy the larger, more expensive option, even though they may not need it.

Structure

1Introduction to the decoy effect with a fictional example
2Explanation of the decoy effect using Starbucks coffee pricing
3Demonstration of how the decoy effect manipulates purchasing decisions

Original caption

2- Why there are ALWAYS 3 sizes of Coffee or Fries? #UK #FifaWorldcup

More from @hidden_facts82

Product placement

Starbucks Coffee: ACTS - it is a coffee shop where customers can buy coffee in different sizes. Removing it would change the context of the purchasing decision. The menu board is operated by the barista to show prices and sizes. The logo also appears on the coffee cups.

On-screen text

WAS NEVER THERE TO BE CHOSEN JUST TO PUSH YOU DECOY EFFECT STARBUCKS COFFEE SMALL $3 MEDIUM $6 LARGE $7 SMALL $3 MEDIUM $6 LARGE $7 DID NOT SAVE DID NOT MAKE A SMARTER PURCHASE LARGE LARGER = "CHEAPER" THAT'S THE TRICK REAL VALUE DIFFERENCE MENTAL TRAPS THE PSYCHOLOGY OF MONEY TIMELESS LESSONS ON WEALTH, GREED, AND HAPPINESS MORGAN HOUSEL

Transcript

The middle option was never there to be chosen. It was there to push you toward the more expensive one. That's called the decoy effect. And companies use it on you every single day. That's why you see things like small coffee, $3. Medium, $6. Large, $7. So you look at the medium and think, for $1 more, I might as well get the large. It's a much better deal. But it's not. You didn't save money. You didn't make a smarter purchase. You just bought more of what you didn't need because the numbers shut off your logic. That's the trick. Your brain doesn't usually evaluate the real value of the product. It evaluates the difference between the options the seller puts in front of you. That's why we fall so easily into these traps. And that's why it's so important to read books like The Psychology of Money because they teach you to spot the mental traps that drain your wallet without you noticing.