one type of systematic error arises because people tend to think of benefits in percentage term rather than in absolute dollar amounts. as an example, samir is wiling to drive 20 minutes out of his way to save $4 on grocery item that cost $10 at local market. but he is unwilling to drive 20 minutes out of his way to save $10 on laptop that cost $400 at a local store. in percentage terms, how big is the saving on the grocery items? on the laptop? in absolute terms, how big is the saving on the grocery item? on the laptop? idf samir is willing to sacrifice 20 minutes of his time to save $4 in one case, shouldn't he also be willing to sacrifice 20 minutes of his time to save $10?
2 answers
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A. Savings on the grocery item: 40%
On the laptop: 2.5%
B. In absolute terms
Savings on grocery items: $4
On the laptop: $10
C. If Samir is willing to sacrifice 20 minutes of his time to save $4 in one case, shouldn't he also be willing to sacrifice 20 minutes of his time to save $10: Yes
On the laptop: 2.5%
B. In absolute terms
Savings on grocery items: $4
On the laptop: $10
C. If Samir is willing to sacrifice 20 minutes of his time to save $4 in one case, shouldn't he also be willing to sacrifice 20 minutes of his time to save $10: Yes
1 answer