Things That Make Me Go Hmmmmmm
Behavioral Economics is my jam! If it had been a real thing back when I was in college, I would have ditched my Business Major in a heartbeat.
For those who don't know what it is, the short description is that it's the study of how and what effects your economic decision making. What makes you buy one car over another? How will your current experience influence your investing decision a few minutes from now, a day from now, a week from now? That kind of stuff.
What does one do with the results? Well, you can use them for good or evil. As a business type, I always think about how it can increase profits. As a human, I also think about how it could help make people make better decisions for themselves or society.
An example of the latter, say you want to increase the percentage of employees investing in a 401K (assuming that's a good decision for their financial wellbeing). How you do it is automatically sign them up for it as people don't want to do the work of either opting in or opting out. You put them in, they're going to stay in. You could apply the same to organ donation. Countries or states that default people into a Yes on organ donation have significantly higher participation than when someone is forced to check Yes.
But, as much as I care about peeps, I do have an MBA so I usually go to the money. One thing that has me wondering relates to pumping gas. Because when I'm standing at the pump, I've got nothing better to do than wonder about it.
What, exactly, prompts the thought? The instructions on the pump.
For those who don't know what it is, the short description is that it's the study of how and what effects your economic decision making. What makes you buy one car over another? How will your current experience influence your investing decision a few minutes from now, a day from now, a week from now? That kind of stuff.
What does one do with the results? Well, you can use them for good or evil. As a business type, I always think about how it can increase profits. As a human, I also think about how it could help make people make better decisions for themselves or society.
An example of the latter, say you want to increase the percentage of employees investing in a 401K (assuming that's a good decision for their financial wellbeing). How you do it is automatically sign them up for it as people don't want to do the work of either opting in or opting out. You put them in, they're going to stay in. You could apply the same to organ donation. Countries or states that default people into a Yes on organ donation have significantly higher participation than when someone is forced to check Yes.
But, as much as I care about peeps, I do have an MBA so I usually go to the money. One thing that has me wondering relates to pumping gas. Because when I'm standing at the pump, I've got nothing better to do than wonder about it.
What, exactly, prompts the thought? The instructions on the pump.
I'm assuming most people are familiar with the grade selection. You press the button of the gas mixture you want then pump. But, I always look at the right of the actual buttons where they give you a picture representation of how to operate the pump. Notice above that the finger is selecting Unleaded.
Notice on other pumps pictured above, the finger is pointing at Unleaded Plus or Unleaded Super.
Here's what I want to know...
Does the finger image influence the fuel grade selection? Assuming the gas prices are the same for each pump (let's say $1.899, $2.099 and $2.199 for Unleaded, Unleaded Plus and Unleaded Super respectively). If the finger is pointed at Unleaded Plus do a higher percentage of people select that than they do if it's pointing at Unleaded or Unleaded Super? (Y'all know about the influence of the extra 9 in those prices, right? Behavioral Economics!)
Let's say studies show the finger image does influence the grade selection. My next thing to wonder is if stations/fuel companies are putting the finger image on the grade where their margin is highest?
Take that even further, are they putting the finger image on the grade where the influence of the grade selection increases overall margin for all three grades combined?
Oh, and does the location (demographics of the neighborhood or proximity to freeways, for example) also affect the decision?
Math! Science! People! I want to know!
So, I've tried to google this with no success. And, by google, I don't mean I spent 5 minutes putting various things in the search engine. I've probably invested hours. But, I haven't been able to find anything that answers my questions.
Why not? Well, because the gasoline manufactures and distributors are keeping it a secret, of course. I know I would.
So, if anyone wants to give me some answers, without getting sued or killed, I would love to know. In the meantime, I'm still going to ponder each time I fill my tank. Fortunately, that's only once every two weeks so I'm not wasting too much time on it.
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