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Ask Ariely: On Coin Conundrums, Reading Realizations, and Ice-Breaking Ideas

Here’s my Q&A column from the WSJ this week  and if you have any questions for me, you can tweet them to @danariely with the hashtag #askariely, post a comment on my Ask Ariely Facebook page, or email them to AskAriely@wsj.com.

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Dear Dan,

A chain of coffee shops in Israel, where I live, had tremendous success charging a flat price of five shekels (about $1.35) for coffee and other items on its menu. People would get coffee and often a muffin or something else to eat. Now the chain has raised the flat price at its cafes to six shekels, and suddenly my friends don’t go anymore. Why?

—Ron 

Some time ago, Unilever entered several markets in India and Africa, offering tiny amounts of products such as soap or milk in packages that were small and inexpensive. The company found that it could do well selling these products so long as the price for them matched the smallest coin then circulating in the economy

For example, as long as people in Kenya were buying a small portion of milk for 10 shillings, they would purchase a lot of it. But when the cost increased even a smidgen over the value of the smallest local coin, sales dropped dramatically.

I suspect that your coffee shop is suffering for the same reason. In Israel, the five-shekel coin is widely used, and though Israel has smaller coins, the same general principle probably applies: People are more inclined to buy items that are priced on the scale of familiar, low-denomination coins.

When something costs the same as a coin, we can categorize the purchase as cheap and not think too much about it. But the moment something costs more than a single coin, we start thinking more carefully about whether or not we want to buy it.

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Dear Dan,

I turned 40 this year, and it is harder and harder for me to read text on my cellphone. Why did cellphone companies start reducing the font sizes on our phones?

—Ayelet 

It’s clearly a conspiracy among evil conglomerates. The cellphone companies are joining forces with the eyeglasses companies to persuade those of us over 40 that our eyesight is deteriorating and we need to purchase buy new glasses.

On the other hand, it may be that sometimes we just don’t want to acknowledge certain conclusions or get certain answers (that we are spending more than we should, that we are getting older and so on). In such cases, people turn out to have a startling ability for self-delusion, even when the desire not to acknowledge the truth in the short term can hurt us in the long term.

So maybe you should try to adopt eyeglasses as a fashion statement and use them to express your new, somewhat older and increasingly excellent self. (And happy birthday!)

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Dear Dan,

I’m going to host a party soon with some old and new friends, and I want to do something to break the ice. Any advice?

—Moran 

In such situations, I find it very useful to start the evening by declaring that the event will operate under Las Vegas rules: What happens at the party stays at the party. Next I tell people that sharing embarrassing stories is a wonderful way to get to know one another. Finally, I get things going by sharing one about myself.

To give you the feel for it, here is the shortest such story anyone has ever shared with me: “I’m going on a blind date. I knock on the door. A woman opens it. I ask, ‘Is your daughter home?’ The door closes. I turn around and leave.”

See the original article in the Wall Street Journal here.


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