Wednesday, July 09, 2003

Another Economics Puzzler

This weekend we went up to my parents' town in Arkansas. We used to stay at a Days Inn when visiting, but this time it turned out that Doubletree had bought the Days Inn location. So we stayed at the Doubletree.

It also turned out that the Doubletree had a new policy on breakfast: Whereas the Days Inn had provided "free" breakfast, Doubletree was charging $6.95 per person.

I resented this. But I'm not sure why. When I think about it rationally, I know that Days Inn was not providing a "free" breakfast. Whatever they provided was incorporated into the price of the room. All that Doubletree was doing was making the price of breakfast explicit -- and avoidable, for that matter, if we wanted to eat elsewhere. So I really should have been grateful.

But I still found it mildly irritating. It felt like being cheated somehow. And I assume that other people would share this feeling, irrational as it is.

Anyway, it's something else to add to the list of human cognitive biases that affect our rationality. I suspect this bias shows up in other venues as well: Think of the feeling of resentment you experience when you find out -- ahead of time -- that the airline is not providing a "free" lunch or dinner on your three-hour flight.


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