Do you ever find yourself coming across a particular product and begin thinking about how it could make your life easier, more efficient/productive, or happier? Turns out you’re not alone, in fact, the majority of us do this every single day. And it’s not just limited to products, we compare everything from potential jobs, who to vote for or who we would like to date. We are wired to break down the perceived benefits of something and then compare them to others.
If there was a time where we lived without the consumer desires that we have today then surely we could recreate that mindset again. All it would take is to do what Professor of Psychology and Behavioral Economics, Dan Ariely (@danariely) calls “Break(ing) the cycle of relativity” i.e. focusing more on what we have v.s. what we do not.
It’s All Relative
In his book Predictably Irrational, Ariely talks about how the decisions we make are relative to our environment. “We look at our decisions in a relative way, and compare them locally to the available alternative.”
Take this image, for example, it shows two sets of circles: one surrounded with smaller circles and one with larger circles. On the left, the circle in the center appears larger than the others, but on the right, it appears smaller.
This illustration paints a simplified picture of how we make purchasing decisions. Example: When we buy a bar of soap that costs $4.00, purchasing a bar that costs $3.75 (Left Circle) wouldn’t make a difference to us; in fact, we would consider that a deal. But what if you are used to paying $1.50 for a bar of soap (Right Circle), now suddenly the bar that costs $3.75 seems expensive.
This is what is called Arbitrary Coherence, meaning that even though “initial prices can be ‘arbitrary’, once those prices are established in our minds, they will shape not only present prices but also future ones…”
This example also reveals what happens when we compare ourselves to others – more specifically what other people have. If we look at what others have with feelings of indifference (Left Circle) then we don’t feel like we are in competition with them. However, if we look at them with feelings of envy and jealousy (Right Circle), then we will confine ourselves to a life of trying to “out accumulate” those around us – to put it in Ariely’s words “the more we have, the more we want.”
The Diderot Effect
In the 18th century, the French philosopher Denis Diderot published “Regrets on Parting with My Old Dressing Gown.” An essay recounting when he received a scarlet gown from a friend as a gift. Upon receiving the gown he realized that the rest of his possessions seemed inferior by comparison.
“In its shelter I feared neither the clumsiness of a valet, nor my own, neither the explosion of fire nor the spilling of water. I was the absolute master of my old robe. I have become the slave of the new one.”
– Denis Diderot
He began to replace his belongings with those he felt were more suited to the higher caliber of his newly acquired gown. His straw chair was replaced with one made of leather; the wooden table for a nice bureau; and an empty space in the corner was filled with a brand new writing desk.
Wikipedia describes this process as “The introduction of a new possession that is deviant from the consumer’s current complementary goods can result in a process of spiraling consumption.”
Once we attain something of higher value, we then desire other things of higher value that compliment it. Such as when we buy a new house and feel the need to furnish it with new furniture and do away with our older, less aesthetically appealing furniture. We compare what we have and opt for the better option of the two (cycle of relativity).
If we wish to consume less we must find the triggers that cause us to consume in the first place. Take for example shopping via the internet, or what consulting and tech service company SapientRazorfish calls in one report “Digital Dopamine“. This report found that “Seventy-six percent of people in the US, seventy-two percent in the UK, seventy-three percent in Brazil and eighty-two percent in China say they are more excited when their online purchases arrive in the mail than when they buy things in store.”
This is because dopamine is released once we anticipate that there is a reward, rather than when we actually receive the reward itself. Which explains why we find the “hunt” for a bargain so exciting, we are literally getting high from the experience. I’ve experienced this first hand looking through thrift stores for inexpensive books. Once I found a book I’d been looking for it was like stumbling across gold!
“The brain automatically deduces that if the decision was a good one yesterday, then it is a safe bet again today and the action becomes a routine.”
– Nir Eyal, Hooked
If we just stay clear of mindless web browsing or killing time at the mall we could curb anticipation and reduce our temptation to spend. Because the moment we see a product that we believe will offer a benefit, our brains get a hit of dopamine – at which point it becomes a lot more difficult to resist the urge to spend.