WEBVTT - The Psychology of Black Friday - lab 119 0:00:03.680 --> 0:00:10.119 I'm t T and I'm Zakiah and this is Dope Labs. 0:00:11.360 --> 0:00:14.600 Welcome to Dope Labs, a weekly podcast that mixes hardcore 0:00:14.680 --> 0:00:17.599 science with pop culture and a healthy dose of friendship. 0:00:22.360 --> 0:00:25.120 Are you doing Black Friday shopping this year or what? 0:00:25.320 --> 0:00:30.000 No, I'm doing Black Friday saving? Okay, in this economy, 0:00:30.480 --> 0:00:32.559 put those dollars back in your pocket. There's only two 0:00:32.600 --> 0:00:36.519 of them, but put them back. What about you? 0:00:36.520 --> 0:00:39.040 You know, it's been a long time since I participated 0:00:39.120 --> 0:00:41.720 in Black Friday. I usually like to do like the 0:00:41.840 --> 0:00:44.720 pre Black Friday sales that they like, you know, game 0:00:44.800 --> 0:00:46.760 you on where it's like, oh you get a sneak 0:00:46.800 --> 0:00:49.400 peek to our Black Friday sales. Those things get me 0:00:49.640 --> 0:00:53.760 every time. But this year, this economy, you know, we 0:00:53.760 --> 0:00:55.040 got to think a little bit smarter. 0:00:55.320 --> 0:00:56.880 Yeah, well, I don't know. 0:00:56.960 --> 0:00:59.440 It sounded like think it's smarter, but also maybe dipping 0:00:59.440 --> 0:01:02.400 your toe in the waters based on what you're just saying, 0:01:02.520 --> 0:01:04.960 tricking myself, you know, doing a bunch of girl math 0:01:05.040 --> 0:01:06.800 to say, oh, yeah, I didn't spend any money this 0:01:06.840 --> 0:01:09.240 Black Friday, right, this is how it was supposed to be. 0:01:09.400 --> 0:01:12.160 I needed this stuff. But you know what our minds 0:01:12.160 --> 0:01:14.720 are tricking us all the time. And people may think 0:01:14.760 --> 0:01:17.360 there's no science to Black Friday shopping and the deals, 0:01:17.400 --> 0:01:20.640 but there is now. I know a long time ago 0:01:21.360 --> 0:01:24.600 we knew that Amazon Prime Day was a bus and 0:01:24.920 --> 0:01:28.160 we gave up on that right. But for Black Friday, 0:01:28.200 --> 0:01:30.360 I still have questions. So let's jump into it. 0:01:30.400 --> 0:01:30.960 What do we know? 0:01:31.200 --> 0:01:33.319 I think we know that Black Friday is a very 0:01:33.360 --> 0:01:35.399 special holiday. Can I call it that? 0:01:35.600 --> 0:01:36.039 I think so. 0:01:36.319 --> 0:01:39.319 For a lot of folks, people are camping out. I 0:01:39.319 --> 0:01:41.160 don't know if they're still fist fighting, but I remember 0:01:41.240 --> 0:01:43.559 that they were fist fighting back in the day trying 0:01:43.560 --> 0:01:45.160 to get those flat screen TVs. 0:01:45.480 --> 0:01:47.920 I think the flat screen TV. If there was an 0:01:48.000 --> 0:01:50.960 ornament for America, that's it because it runs on capitalism 0:01:50.960 --> 0:01:53.560 and consumerism. Put a flat screen TV on your. 0:01:53.560 --> 0:01:54.480 Christmas treet this year. 0:01:56.120 --> 0:02:00.520 I know that Black Friday has often been an economic 0:02:00.560 --> 0:02:03.440 indicator or an indicator for what the shopping season is 0:02:03.480 --> 0:02:06.040 going to be, what people are willing to spend, And 0:02:06.240 --> 0:02:09.919 even as we've seen perse Strings Titan that over time, 0:02:10.080 --> 0:02:12.840 people still spend on this day. And we just had 0:02:12.880 --> 0:02:15.200 an episode where we talked about the economy, and so 0:02:15.280 --> 0:02:18.079 I'm wondering how you know, with this new influx of 0:02:18.120 --> 0:02:20.880 what doctor West was calling discouraged workers, so people who 0:02:20.919 --> 0:02:23.400 were you know, on the job market, but then you know, 0:02:23.440 --> 0:02:26.000 got tired of applying for jobs and so aren't applying anymore. 0:02:26.080 --> 0:02:29.320 How that will impact Black Friday sales? Are those people 0:02:29.360 --> 0:02:31.960 saving or are they feeling like, oh, let me spend 0:02:32.080 --> 0:02:34.720 during a time where there's more discounts. I don't know 0:02:34.760 --> 0:02:36.240 how that psychology works. 0:02:36.560 --> 0:02:38.880 I don't think I know the psychology of any of it, 0:02:38.919 --> 0:02:41.880 and I need help because I think I've seen a 0:02:41.919 --> 0:02:44.320 lot of the like Doorbusters and the lines you know, 0:02:44.520 --> 0:02:47.320 lining up in advance that's gone away, but there are 0:02:48.080 --> 0:02:50.480 digital substitutes for that, like where it says twenty three 0:02:50.480 --> 0:02:51.880 people have this in their car, and I'm like, I 0:02:51.960 --> 0:02:53.000 better hurry up and check out. 0:02:53.440 --> 0:02:56.200 Is that a thing? Is that real? Is something wrong 0:02:56.240 --> 0:02:56.600 with me? 0:02:56.680 --> 0:02:59.639 Every time there's something wrong with both of us. 0:03:02.000 --> 0:03:03.640 I think we have to get into it because it 0:03:03.639 --> 0:03:06.840 feels like it's a little bit of economics and psychology 0:03:07.080 --> 0:03:07.760 tied together. 0:03:09.360 --> 0:03:11.000 Mine all my money, money on my mind. 0:03:11.840 --> 0:03:12.440 There you go. 0:03:17.160 --> 0:03:21.359 For today's lab we're looking at Black Friday. And I 0:03:21.440 --> 0:03:24.880 know people sometimes think like, oh what I buy is 0:03:24.919 --> 0:03:27.800 my business and you know there's no science to it, 0:03:27.840 --> 0:03:30.520 but I don't think so we have to look at 0:03:30.639 --> 0:03:33.600 like free shipping and there's only three left, Like why. 0:03:33.520 --> 0:03:35.440 Do those things hijack our brains? 0:03:35.840 --> 0:03:38.960 And what's happening? Especially when I get an email that 0:03:38.960 --> 0:03:41.640 says I left something in my car? It works every time, 0:03:41.760 --> 0:03:44.480 it works every time. I'm like that poor little item 0:03:44.480 --> 0:03:44.880 I needed. 0:03:46.200 --> 0:03:48.560 So we're here to get some answers about that. 0:03:48.880 --> 0:03:51.720 My name is done. Really, I'm a professor of psychology 0:03:51.760 --> 0:03:56.200 and behavior economics at university, and I do research on 0:03:56.520 --> 0:04:00.120 human irusianality and just kind of to help us think 0:04:00.200 --> 0:04:06.000 about human irrationality. I think about what gets us to 0:04:06.200 --> 0:04:11.280 act in ways that we don't know and don't seem 0:04:11.320 --> 0:04:14.600 to be logical. Now, I don't mean that they are 0:04:14.960 --> 0:04:17.880 not logical, but they're not the standard logic. 0:04:18.240 --> 0:04:21.400 How people behave around spending really varies with a personal person. 0:04:21.440 --> 0:04:23.279 I know me as a key, are not spending the same, 0:04:24.160 --> 0:04:27.280 We're not spending the same. I'm fast and furious with it. 0:04:27.480 --> 0:04:30.640 My friends, she's cold and calculated. But what types of 0:04:30.760 --> 0:04:33.920 questions are you answering in your work? Like what can 0:04:33.960 --> 0:04:35.320 we learn from your work? 0:04:35.480 --> 0:04:38.960 I try to uncover what is the logic by which 0:04:39.000 --> 0:04:43.280 we work, and the logic is often interesting and curious 0:04:43.480 --> 0:04:49.560 and not consistent. So for example, you could say, why 0:04:50.120 --> 0:04:54.640 would we stand in line for forty five minutes to 0:04:54.760 --> 0:04:58.800 get a cone of Ben and Jerry's ice cream? That's 0:04:58.839 --> 0:05:03.160 what cost us to dollars. It doesn't make sense rationally, 0:05:03.760 --> 0:05:06.440 but when you think about the allure free and so on, 0:05:06.520 --> 0:05:09.839 you can understand what it is. So there's a logic 0:05:09.960 --> 0:05:12.960 to what we do as human beings, just that the 0:05:13.040 --> 0:05:16.640 logic is not the we calculate, we trade off, and 0:05:16.720 --> 0:05:19.440 we do we do the writing. So that's that's the 0:05:19.520 --> 0:05:21.040 kind of thing that I try to uncover. 0:05:21.320 --> 0:05:24.000 H So this is a study of the human mind 0:05:24.040 --> 0:05:25.560 and how it makes decisions. 0:05:25.960 --> 0:05:29.159 My metaphor for the human mind is that it's a 0:05:29.279 --> 0:05:34.440 vintage Swiss army knife. Two parts Swiss army knife and vintage. 0:05:35.080 --> 0:05:38.320 Let's start with the Swiss army knife part. The Swiss 0:05:38.440 --> 0:05:41.040 army knife is kind of okay in lots of things, 0:05:41.560 --> 0:05:46.120 but it's not really excellent in anything. It's greatness come 0:05:46.160 --> 0:05:48.760 from the fact that there's lots of tools that can 0:05:48.800 --> 0:05:51.120 do lots of different things, and our mind is a 0:05:51.120 --> 0:05:54.360 little bit like that too, not particularly excellent in anything, 0:05:55.040 --> 0:05:58.159 quite okay in lots of things, and we can carry 0:05:58.200 --> 0:06:02.440 it with us. It's a vintage Sweet Sarmon knife. And 0:06:02.520 --> 0:06:06.240 what I mean by that is that our set of 0:06:06.360 --> 0:06:10.240 tools in our mind to deal with the world evolved 0:06:10.279 --> 0:06:15.640 in a very different evolutionary period. We were roaming the savannah, 0:06:16.000 --> 0:06:19.440 we were dealing with hunting, we were dealing with lions. 0:06:20.080 --> 0:06:23.599 Money is a new invention. We were not evolutionary designed 0:06:23.600 --> 0:06:25.719 to deal with money. We don't have a detector in 0:06:25.720 --> 0:06:29.560 our brain to figure out money. We think about compound 0:06:29.640 --> 0:06:32.520 interest and so on. So when we come to deal 0:06:32.560 --> 0:06:36.480 with money, we have these ancient tools that are were 0:06:36.480 --> 0:06:37.280 never that good. 0:06:37.520 --> 0:06:41.120 I like the vintage Swiss army knife. Yes, metaphor, because 0:06:41.720 --> 0:06:45.960 we've talked about anxiety in today's world, like our brains 0:06:45.960 --> 0:06:48.640 are not caught up to a cell phone and to 0:06:48.720 --> 0:06:51.440 somebody texting you saying can we talk later? That feels 0:06:51.480 --> 0:06:54.120 like the snake, you know, it feels like the terror 0:06:54.800 --> 0:06:57.560 because we have these old systems. What are the consumer 0:06:57.640 --> 0:07:01.480 issues that you think are could be it root costs 0:07:01.560 --> 0:07:04.960 or brain but like what's affecting and hurting people the 0:07:05.000 --> 0:07:05.760 most right now? 0:07:06.080 --> 0:07:10.280 So you know, money is an amazing invention. It allows 0:07:10.320 --> 0:07:14.160 society to move forward in all kinds of unbelievable ways. Right, 0:07:14.200 --> 0:07:17.760 if we didn't have money, how society looks like. Right, 0:07:18.360 --> 0:07:23.960 money is amazing. But money requires that we think about 0:07:24.720 --> 0:07:29.880 opportunity costs. Money requires that we think about now versus later. 0:07:30.840 --> 0:07:37.360 Spending now is unbelievably emotional. It really holds us and 0:07:37.440 --> 0:07:43.720 we feel like something. We are not good at delaying rewards, 0:07:43.800 --> 0:07:49.680 so we end up overspending now, sometimes even taking debt. 0:07:50.440 --> 0:07:53.920 That brings us into the second problem, which is we're 0:07:54.080 --> 0:07:58.800 not really good at understanding compound interest. In all of 0:07:58.840 --> 0:08:02.840 the world, I would say the poverty trap is that 0:08:03.160 --> 0:08:07.000 low income individuals take a loan at a high interest 0:08:07.080 --> 0:08:12.720 rate and then it's very, very hard to escape. So 0:08:12.800 --> 0:08:16.200 those are kind of fundamental about money. They're not about 0:08:16.440 --> 0:08:20.800 shopping and so on, but they're fundamentally about money. The 0:08:20.960 --> 0:08:25.160 other thing I would say is that we have not 0:08:25.320 --> 0:08:31.120 yet figured out the way to make saving fun. Like 0:08:31.200 --> 0:08:37.920 think about it. Shopping certainly fun, fun, Saving like it's 0:08:37.960 --> 0:08:42.920 this invisible activity, like when was the last time you 0:08:42.960 --> 0:08:46.400 went to your friends and you say tity, You wouldn't 0:08:46.400 --> 0:08:51.600 believe it. I saved two thousand dollars and I found 0:08:51.640 --> 0:08:56.280 a better insurance and I'm paying. It's not part of 0:08:56.320 --> 0:08:57.000 the conversation. 0:08:57.480 --> 0:09:00.320 It never is. Yes, And you know what that makes 0:09:00.360 --> 0:09:02.520 me think about, based on what you were just saying, 0:09:02.520 --> 0:09:05.520 how it's like way more fun to spend now rather 0:09:05.600 --> 0:09:08.120 than think about spending later. It makes me think about 0:09:08.160 --> 0:09:12.520 the buy now, pay later apps and things like that. Yes, 0:09:13.520 --> 0:09:18.679 that is relatively new to our way of spending. There 0:09:18.679 --> 0:09:21.320 were things like layaway you would get the wouldn't get 0:09:21.320 --> 0:09:23.839 the product till you finished paying. But now you can 0:09:23.880 --> 0:09:25.840 get the product you've only paid a little bit, and 0:09:25.880 --> 0:09:28.760 then you keep paying until you've paid it off. In 0:09:28.960 --> 0:09:32.800 simple terms, what's happening in our brains when we make 0:09:32.840 --> 0:09:37.360 a purchase and get to split that into future payments, 0:09:37.400 --> 0:09:41.480 and what mechanisms make the buy now, pay later feel 0:09:41.600 --> 0:09:43.480 easier than a credit card? 0:09:43.600 --> 0:09:48.360 Ye? So, so what happened with the buy now, pay 0:09:48.440 --> 0:09:54.000 later is First of all, the terminology is very good, right. 0:09:54.160 --> 0:09:58.240 It doesn't tell you pay much more later. It doesn't 0:09:58.240 --> 0:10:02.040 say anything about the interest. It doesn't say buy things 0:10:02.080 --> 0:10:07.720 you don't really need and pay for them later. The 0:10:07.800 --> 0:10:11.320 world has a vast interest in something that is not 0:10:11.480 --> 0:10:15.720 consistent with our best interest. In mind, Every coffee shop 0:10:15.800 --> 0:10:19.680 wants to sell you another coffee. Every restaurant want to 0:10:19.679 --> 0:10:23.160 sell you another dessert. Every supermarket want to send you 0:10:23.200 --> 0:10:26.320 another cook Now you can go to the supermarket with 0:10:26.400 --> 0:10:30.959 a plan what's called the shopping list. But the supermarket 0:10:31.000 --> 0:10:31.840 also has a plan. 0:10:32.000 --> 0:10:33.520 It does, it does. 0:10:33.559 --> 0:10:35.720 And their plan is not the same as your plan, 0:10:36.600 --> 0:10:41.080 and they control the environment. They decide what to put 0:10:41.120 --> 0:10:43.560 it hige level and what to put it the checkout. 0:10:43.840 --> 0:10:47.800 We live in the world in which people have plans 0:10:49.080 --> 0:10:52.400 to part us from our money. And then there's all 0:10:52.480 --> 0:10:55.760 kinds of tricks. So let's start with it, like the 0:10:55.880 --> 0:11:00.000 most basic trick. The most basic trick is called a sale. 0:11:00.920 --> 0:11:07.200 Imagine that there's a shirt for fifty dollars versus another 0:11:07.320 --> 0:11:11.840 store the same shirt, and they say this used to 0:11:11.880 --> 0:11:15.120 be one hundred dollars and now it's on fifty percent 0:11:15.240 --> 0:11:21.000 off and it's fifty dollars. Now why, like, when you 0:11:21.000 --> 0:11:24.400 think about sale, a sale, something is it's fifty Why 0:11:24.400 --> 0:11:27.160 would you care what it used to cost at some 0:11:27.360 --> 0:11:31.760 part time in the history? Right? You shouldn't. You should 0:11:31.760 --> 0:11:35.520 say is this shirt worth this price to me? Yes? 0:11:35.640 --> 0:11:35.960 Or no? 0:11:36.920 --> 0:11:39.800 Why do we care that it used to be one 0:11:39.800 --> 0:11:44.200 thousand dollars and now it's fifty, but we do why 0:11:44.200 --> 0:11:47.920 would we do a deal? That's right? That's right. What 0:11:48.040 --> 0:11:52.520 happens is that we have a really hard time assessing value. 0:11:53.280 --> 0:11:56.160 If I show you a shirt, I say, how much 0:11:56.240 --> 0:11:59.440 is it worth? I don't really know, very hard to 0:11:59.440 --> 0:12:02.640 figure out. But if it used to be one hundred 0:12:02.720 --> 0:12:05.360 dollars and now it's fifty, it's probably a good deal. 0:12:06.040 --> 0:12:09.880 So it's kind of a lazy way to compute value 0:12:10.160 --> 0:12:14.280 without thinking about how valuable is another show to you. Now, 0:12:14.800 --> 0:12:18.160 when you pay for something, you should care about what 0:12:18.280 --> 0:12:22.640 it is that you're getting, but we don't. Why it's 0:12:22.720 --> 0:12:25.160 very hard to estimate the value of what we're getting, 0:12:25.679 --> 0:12:28.280 so we estimate other things, like how much work has 0:12:28.320 --> 0:12:28.960 gone into that. 0:12:43.880 --> 0:12:47.400 So as a freelancer doing different work, the better I 0:12:47.480 --> 0:12:50.720 get at moving through projects, I have people on standby 0:12:50.760 --> 0:12:52.360 that I can subcontract out to help. 0:12:52.840 --> 0:12:53.960 I feel like when it took. 0:12:53.840 --> 0:12:55.200 A long time and there was a lot of back 0:12:55.200 --> 0:12:57.200 and forth, but really I didn't know what I was doing. 0:12:57.200 --> 0:12:57.760 At that point. 0:12:57.840 --> 0:13:00.760 People were like, oh, you've worked so hard, and now 0:13:00.760 --> 0:13:03.280 they're like, you turn this around in twenty four hours. 0:13:03.280 --> 0:13:09.360 We charge you this, sir, but also you didn't have 0:13:09.440 --> 0:13:12.240 to wait consider this, you know. 0:13:12.240 --> 0:13:15.320 And that's and that's because that's because the question is 0:13:16.440 --> 0:13:18.880 you think that people can assess the real value of 0:13:18.960 --> 0:13:23.959 your work, but they can't, so so they assess efforts. 0:13:24.600 --> 0:13:27.840 So there's this story wait. 0:13:27.679 --> 0:13:30.760 For thinking they can do it, or then from that VNA. 0:13:30.559 --> 0:13:32.920 Because because you know, if you if you go back 0:13:32.960 --> 0:13:36.319 to the vintage twist army knife, they are not equipped 0:13:37.080 --> 0:13:41.000 with a way to evaluate your work, so they're evaluating 0:13:41.080 --> 0:13:45.480 something else. There's a there's this story that Picasso is 0:13:45.480 --> 0:13:49.599 sitting on a bench and a woman come and says, Picasso, 0:13:51.000 --> 0:13:55.280 I'm a huge fan. Would you draw a picture of 0:13:55.320 --> 0:13:59.320 painting of me? And he takes his pen and does 0:13:59.360 --> 0:14:01.880 this thing, and in thirty seconds she has this thing 0:14:01.920 --> 0:14:03.280 and she looks at it. She said, you know what, 0:14:04.080 --> 0:14:06.560 you have captured my essence. I don't know how you 0:14:06.600 --> 0:14:09.880 do it, Like there's only one line and you've captured 0:14:09.920 --> 0:14:12.839 my essence. He said, how much is it? And it 0:14:12.880 --> 0:14:16.720 says it's five hundred dollars. He says five hundred dollars 0:14:16.720 --> 0:14:20.120 for thirty seconds. No, no, it's five hundred dollars for thirty 0:14:20.200 --> 0:14:21.520 years and thirty seconds. 0:14:21.800 --> 0:14:24.000 Yeah, my experience over time. 0:14:24.880 --> 0:14:28.120 That's right. Now, we can say that, but the truth 0:14:28.240 --> 0:14:32.440 is it's really hard. Fairness and effort are very much, 0:14:32.560 --> 0:14:36.160 deeply embedded in us, and we use them as the 0:14:36.240 --> 0:14:38.320 strategy to evaluate things. 0:14:38.440 --> 0:14:41.680 We said a lot about Black Friday and shopping and 0:14:41.680 --> 0:14:45.160 spending money, but I feel like not everything can be 0:14:45.360 --> 0:14:48.880 completely bad. There's always a little bit of good there, right, 0:14:49.080 --> 0:14:53.119 no absolute evil, Like, what's the silver lining. 0:14:52.880 --> 0:14:54.960 On this h chaotic evil? Chaotic good? 0:14:56.520 --> 0:15:00.440 Black Friday is very special. It's one day of the year. 0:15:01.280 --> 0:15:05.520 It's one day of the year. Now, imagine that you 0:15:06.000 --> 0:15:09.960 went on an expensive meal. Imagine that usually you go 0:15:10.080 --> 0:15:13.760 out and you spend one hundred dollars on dinner and 0:15:14.160 --> 0:15:17.920 you buy the second chip this morning on the menu. 0:15:19.040 --> 0:15:23.360 Imagine that on some Tuesday, at some point you decide 0:15:23.400 --> 0:15:28.920 to double your restaurant spending and double the wine. What 0:15:28.960 --> 0:15:32.960 are the odds? So it was Tuesday, what's the odds 0:15:33.440 --> 0:15:35.920 that the following Tuesday you will not say to yourself, 0:15:37.440 --> 0:15:40.480 maybe I'm a two hundred dollars per dinner person, not 0:15:40.560 --> 0:15:43.960 one hundred dollars person. So the point I want to 0:15:43.960 --> 0:15:47.400 make is, then when we deviate from a regular strategy, 0:15:48.600 --> 0:15:53.480 an upscale on a regular Tuesday, there's no guarantee that 0:15:53.520 --> 0:15:55.440 we will not do it again and again and again 0:15:55.560 --> 0:15:56.520 on the next Tuesday. 0:15:56.840 --> 0:15:59.400 This is what happened to me becoming friends with tt 0:15:59.800 --> 0:16:05.880 on Tuesday. She's just she's just led me to a 0:16:05.920 --> 0:16:07.440 life of extravagance instead of a. 0:16:07.400 --> 0:16:15.480 One time they go. But imagine that you only met 0:16:15.520 --> 0:16:20.800 her and became extravagant with her one day a year. Now, 0:16:20.960 --> 0:16:24.400 it would not become a routine. So one of the 0:16:24.440 --> 0:16:28.840 things we showed is that when people increased the amount 0:16:28.840 --> 0:16:32.800 of spending and quality of their spending on a regular Tuesday, 0:16:33.360 --> 0:16:37.320 there's a big chance it would become a habit. When 0:16:37.360 --> 0:16:40.400 they do it on a very special day, Oh, I'm 0:16:40.440 --> 0:16:44.680 only doing it on my birthday or Valentine's Day or 0:16:45.240 --> 0:16:51.480 Black Friday, then it remains constrained. So I think that actually, 0:16:52.400 --> 0:16:54.840 you know, we spend too much, we waste, we spend 0:16:54.840 --> 0:16:56.400 in lines too much. I mean, there's all kinds of 0:16:56.400 --> 0:16:59.280 things to talk about the negative side, but I think 0:16:59.320 --> 0:17:04.040 there's also some think protective on saying I'm responsible most 0:17:04.040 --> 0:17:07.240 of the year, and I'm going to pick a day 0:17:07.440 --> 0:17:11.680 in the year to be less responsible, and because it's 0:17:11.760 --> 0:17:14.159 this day, that everybody does on the same day and 0:17:14.240 --> 0:17:19.160 so on. It would protect me from being irresponsible throughout 0:17:19.160 --> 0:17:19.560 the year. 0:17:20.359 --> 0:17:24.399 I feel like a lot of spending, Like Sophora is 0:17:24.520 --> 0:17:28.440 a store that sells makeup and hair stuff and they 0:17:28.480 --> 0:17:31.880 have Sephora Day where they say all their prices are 0:17:31.880 --> 0:17:34.440 going down, and all of these influencers that now I'm 0:17:34.480 --> 0:17:38.480 convinced they're being paid to do these videos, get on 0:17:38.880 --> 0:17:41.639 social media and say this is what you should should 0:17:41.640 --> 0:17:45.680 buy during the Sephora sale. This is my favorite foundation, 0:17:45.840 --> 0:17:49.119 this is my favorite mascara, this is my favorite shampoo, 0:17:49.160 --> 0:17:53.000 this is my favorite conditioner. I've listed everything for you. 0:17:53.400 --> 0:17:55.560 These are the most amazing products and they're going to 0:17:55.600 --> 0:17:57.919 be on discount on Sophora Day. And you see so 0:17:58.000 --> 0:18:01.240 many of those videos you start to feel like, oh am, 0:18:01.280 --> 0:18:04.119 I going to miss out on the opportunity by the 0:18:04.160 --> 0:18:06.520 saying will it be sold out? And so it feels 0:18:06.560 --> 0:18:11.480 like with social media and influencer culture, it's making people 0:18:12.000 --> 0:18:16.480 have this fear of missing out and then spending money 0:18:16.480 --> 0:18:18.119 that they typically wouldn't spend. 0:18:18.359 --> 0:18:21.399 So, just to be clear what we talked about the 0:18:21.440 --> 0:18:28.480 benefits of Black Friday, that it doesn't apply to Sepphori day. 0:18:29.080 --> 0:18:30.120 That's right, you tell her. 0:18:30.359 --> 0:18:33.960 And the reason and the reason is that the way 0:18:34.000 --> 0:18:37.520 that our mind works is that this is a day 0:18:37.520 --> 0:18:41.000 we go a little extra crazy spending, but it's only 0:18:41.040 --> 0:18:46.800 on that day. But if you do sphor a day, 0:18:47.119 --> 0:18:51.280 it's basically like you just spent on one day of 0:18:51.320 --> 0:18:53.919 the year, but there'll be other days in other places. 0:18:54.000 --> 0:18:58.080 And you basically are opening yourself up to say I'm 0:18:58.080 --> 0:19:01.040 a sucker for special days day. 0:19:00.960 --> 0:19:03.600 Now, and they're doing the stories, are doing it often enough. 0:19:04.640 --> 0:19:06.160 Every week is a special. 0:19:07.840 --> 0:19:10.960 But let's talk about the thing you described. A UNI 0:19:11.040 --> 0:19:15.960 described a version of something that is going away, and 0:19:16.040 --> 0:19:21.120 that's called scarcity. You said, it's a day. The next day, 0:19:21.160 --> 0:19:23.439 I would feel bad about it. Right, it's basically how 0:19:23.480 --> 0:19:27.040 does it work, it says, And there's not a lot 0:19:27.080 --> 0:19:31.359 of it, there's just some of it. Whatever is available 0:19:31.359 --> 0:19:33.600 will go away. It will not be to the next day. 0:19:34.600 --> 0:19:39.640 And scarcity gets us to think in a different way. Right, 0:19:39.680 --> 0:19:43.040 if you say, oh, this, this makeup would always be 0:19:43.200 --> 0:19:46.760 there at this price, you would say not interested, get 0:19:46.800 --> 0:19:51.480 it next time. But this makeup is going tomorrow. Now 0:19:51.520 --> 0:19:55.879 you start thinking, what if tomorrow I will decide I 0:19:55.960 --> 0:19:59.919 want it and it will be not available. I would 0:20:00.080 --> 0:20:03.640 feel terrible. I don't want to feel terrible, so let 0:20:03.640 --> 0:20:06.080 me buy it now so that I will not feel terrible. 0:20:06.160 --> 0:20:12.320 So scarcity is another really interesting trick. It's called counterfactual thinking. 0:20:12.960 --> 0:20:16.359 You say, what if I will want it and it 0:20:16.400 --> 0:20:19.960 will not be there? I would say to myself, I 0:20:20.080 --> 0:20:23.239 was not careful. I didn't think why I didn't buy it, 0:20:23.359 --> 0:20:26.040 and therefore we buy it. I'll give you an example 0:20:26.040 --> 0:20:27.399 where this is really strong. 0:20:27.680 --> 0:20:29.200 Oh that's what I want to hear about. 0:20:29.400 --> 0:20:33.040 You go and buy a new electronics. Let's say it's 0:20:33.040 --> 0:20:37.320 a big screen TV, standard American thing to do on 0:20:37.440 --> 0:20:44.280 Black Prides, and the salesperson says, tity, this TV is 0:20:44.320 --> 0:20:48.399 not coming with an extended warranty. The warranty is just 0:20:48.480 --> 0:20:53.240 for a year. How would you feel if a year 0:20:53.440 --> 0:20:57.399 and three days from now, few of this a little 0:20:57.440 --> 0:21:01.240 part of the screen did not work so well and 0:21:01.320 --> 0:21:07.200 you did not buy the extended warranty? How would you feel? 0:21:07.359 --> 0:21:10.560 And you think to yourself, I would feel very stupid. Yes, 0:21:10.800 --> 0:21:13.960 I would say, why on that Black Friday didn't I 0:21:14.040 --> 0:21:17.040 buy the extended warranty when the person offered it to me? 0:21:18.080 --> 0:21:21.520 So you say, you know what at the extended on. 0:21:23.480 --> 0:21:27.720 Many of those places make more money on the extended 0:21:27.760 --> 0:21:31.320 warranty that they make on the electronic themselves. Because the 0:21:31.320 --> 0:21:35.399 electronics we compare, we think about, and so on they 0:21:35.440 --> 0:21:39.280 extended warranty. It's kind of an emotional buy on top 0:21:39.359 --> 0:21:39.879 of something. 0:21:53.720 --> 0:21:55.520 All this just makes me think about girl math, like 0:21:55.520 --> 0:21:58.000 I was talking about before, and so that is the 0:21:58.080 --> 0:22:01.359 mental gymnastics that I do that allows me to feel 0:22:01.400 --> 0:22:04.600 like spending my money isn't so bad. You know, Like 0:22:04.680 --> 0:22:07.240 if I'm returning something and then I get store credit 0:22:08.000 --> 0:22:10.960 and I get something else with that store credit, that's 0:22:10.960 --> 0:22:13.040 something else that I just bought is free. 0:22:13.160 --> 0:22:15.119 Okay, that's a direct line. 0:22:15.119 --> 0:22:16.320 That's not how that works. 0:22:17.640 --> 0:22:21.119 One other interesting place where we do mistakes with money 0:22:21.280 --> 0:22:25.560 is what's called the pain of paying. So imagine that 0:22:25.640 --> 0:22:29.359 tonight you go to dinner. Imagine expensive dinner that's a 0:22:29.400 --> 0:22:32.440 two hundred dollars and you can either pay with cash 0:22:32.560 --> 0:22:35.919 or with credit card, which one would feel worse. 0:22:36.119 --> 0:22:40.800 Cash Why, I don't know, I have no idea, but 0:22:40.840 --> 0:22:41.280 it does. 0:22:41.520 --> 0:22:43.760 It turns out that the thing that is worse with 0:22:43.920 --> 0:22:48.680 cash is the timing of the payment and the consumption 0:22:49.720 --> 0:22:52.360 that when we pay with a credit card, we pay 0:22:52.440 --> 0:22:57.000 some time later. When we prepay, we buy like a 0:22:57.040 --> 0:23:01.480 gift certificate, we pay way in advance. If you go 0:23:01.520 --> 0:23:03.520 to a restaurant with the gift certificate, it feels great. 0:23:03.560 --> 0:23:09.200 It feels free. When when you pay later it doesn't 0:23:09.200 --> 0:23:12.880 feel as bad. Paying at the time of consumption feels 0:23:12.960 --> 0:23:13.800 very bad. 0:23:14.400 --> 0:23:14.600 Now. 0:23:14.720 --> 0:23:18.280 The pain of paying is about this idea that when 0:23:18.359 --> 0:23:21.600 we part with money, it's not just about opportunity costs 0:23:21.640 --> 0:23:25.119 and so on. There's some almost like a moral cost. 0:23:26.119 --> 0:23:29.679 And the more cost has to do with how do 0:23:29.800 --> 0:23:34.359 we feel at the moment of spending. So things like 0:23:34.440 --> 0:23:39.000 credit cards are protecting us from feeling bad. Apple pay, 0:23:39.480 --> 0:23:43.240 Google Pay. Even worse, we don't even understand what work 0:23:43.320 --> 0:23:49.439 what we're spending. So a good piece of advice for 0:23:49.680 --> 0:23:53.560 Black Friday is to say, make a plan of what 0:23:53.600 --> 0:23:56.720 you want to buy. That's number one, right, Buying things 0:23:56.800 --> 0:23:59.000 is fine. Just make sure it's what you want, not 0:23:59.040 --> 0:24:02.399 what somebody else wants. And then and then the second 0:24:02.400 --> 0:24:05.760