Why Free Offers and Meal Deals Shape Our Spending

Free Promotions and Value Meals: What Makes Our Spending “Irrational”?

We like to think we stay rational when making everyday purchases. After all, who wants to spend hard-earned money without thinking it through? But is that confidence justified? Can we really keep outside influences from affecting our purchases and consistently choose the best option? Psychology offers a way to examine the less rational side of shopping.

I. Are We Rational Consumers?

Before the 1950s, classical decision theory prevailed. Its assumption of the “economic person” treated decision-makers as fully rational individuals who always seek to maximize their personal benefit. Put simply, when several options are available, we choose the one that serves us best.

The limitations of this theory become clear in everyday shopping. We cannot gather every piece of information about every product, and the consequences of different purchases are difficult to predict. We would hardly spend three days and nights comparing every shampoo online to find the best value. So how do we actually make purchasing decisions?

In the 1960s, Simon and others proposed a behavioral theory of decision-making based on bounded rationality. Our cognitive abilities are limited, and the situations in which we make decisions are complex. We cannot identify every available option or accurately predict every possible outcome. Their proposed decision rule was satisficing: rather than examining all possible options and their consequences, we consider a few and stop searching as soon as we find one that satisfies us.

Simon illustrated the idea with a hypothetical story about two people on the verge of starvation who arrive beside a cornfield full of food. One pursues the optimal solution, representing the approach of traditional economics: finding the largest ear of corn in the entire field. This person dies of hunger during the search. The other pursues a satisfactory solution, representing behavioral economics: finding an ear within sight that is large enough, eating it, and surviving.

The distinction is straightforward. The fully rational decision-maker gathers comprehensive information, compares and weighs every possibility, and makes the best choice. Bounded rationality revises that assumption by recognizing limits on our ability to obtain and process information. A choice may fall short of the theoretical optimum while still being the most reasonable one available within our current abilities and resources.

II. How Do Our Decisions Go Wrong?

If our purchasing decisions operate within the bounds Simon and others described, how do mistakes arise? Consider a chocolate experiment. Professor Dan Ariely, author of Predictably Irrational, and his friends sold two kinds of chocolate to passersby at a university: Lindt milk-chocolate truffles and Hershey’s Kisses. Each person was allowed to choose only one piece.

Initially, Ariely priced the Lindt truffle at 15 cents, a reduction of 35 cents from its stated original price of 50 cents. The more ordinary Hershey’s Kiss cost 1 cent; its original price was unknown. At this stage, the shoppers’ behavior was described as rational: they carefully compared the two prices, and approximately 73% chose Lindt while 27% chose Hershey’s.

To examine the effect of making something free, Ariely and his friends lowered the Lindt price to 14 cents and offered the Hershey’s Kiss at no charge. The limit remained one piece per person, whether purchased or taken for free. Although the Lindt truffle was still regarded as the better value at 14 cents, its share of selections fell from 73% to 31%. Meanwhile, the free Hershey’s Kiss gained popularity, rising from 27% to 69%.

This illustrates the pull of “free.” Passing up a free offer can feel like losing something, as though we have missed out simply by declining it. Yet our needs are limited. The attraction of getting something for nothing can steer us toward a less rational choice.

Beyond marketing tactics such as free offers, what other common influences shape our shopping decisions?

1. Sincerity

Research by Anderson identified sincerity as the most important trait in interpersonal attraction. People perceived as sincere more readily gain others’ acceptance and willingness to make concessions, even when that sincerity is itself a strategy. Imagine Xiaoming shopping for a new phone. Most shops list only their products’ strengths, but one salesperson also acknowledges a few minor shortcomings. Xiaoming ultimately buys the product that salesperson recommends.

2. Anchoring and Adjustment

Anchoring occurs when we rely too heavily on the first information we encounter, using it as the starting point, or “anchor,” for later judgments. Adjustment is the process of revising that starting point in response to other information or considerations. Those adjustments are often insufficient, however, leaving the final decision strongly influenced by the original anchor.

Suppose a fast-food restaurant normally offers a 42-yuan meal containing a burger, a drink, and snacks for one person. That price establishes an anchor. During holidays, the restaurant offers the same food for 25 yuan, making the discounted meal an easy choice without much thought. The initial 42-yuan price shapes that reaction. If an 18-yuan meal then appears as an “even better deal,” we may abandon the 25-yuan option in turn.

An anchor gives us a quick way to form an impression of something unfamiliar. But it can also discourage further thought. Are the burger, snacks, and drink actually worth 25 yuan—or even 42 yuan?

III. Becoming a More Rational, Healthier Shopper

Many other factors influence shopping, and the mechanisms discussed here can sometimes serve as useful shopping strategies. Returning to a reliable shop or consulting a reputable livestream seller, for example, may help us find products we like more efficiently. Even so, some vigilance remains necessary.

When a product comes with a small free gift, pause and ask yourself: Do I really need it? The gift may simply come home with you and be left unused.

Likewise, when dealing with an enthusiastic, seemingly sincere salesperson, avoid making an impulsive purchase out of politeness or because you are swayed by sales patter. Consider each product’s strengths and weaknesses carefully, then make a choice that fits your own needs.

Keep your spending moderate and within what you can afford. If you feel that some of your spending habits are approaching an unhealthy level, seek help promptly from friends or professionals to prevent more serious problems.