How Behavioural Economics Can Optimize Your Shopping



We have all heard the age-old principle "Bargain higher at first and lower it later for a higher baseline". In essence, that is true. However, the problem with principles like these is that they're overused and extensively known. Therefore, most choices you optimize through this cardinal would be flawed. However, there are some behavioral economic tricks that you can incorporate into your everyday lifestyle. One would be to restrict your shopping by budgeting and saving for all transactions. Money is not fluid. It should be treated as hard as it can be. Budgeting and saving is not only a useful overall principle but is also essential to daily transactions. The human brain is trained to look for the next-best alternative. This allows it to wander beyond the constraints of monetary consideration. Budgeting and saving establish a planned approach that will serve you well. Secondly, use the 50-25 formula. This is a very niche idea that surrounds the premise that you should never buy more than 25 percent of what you have already bought, doubled. For instance, if you bought 5 clothes, you should never buy more than 4 afterward (5×2=10. 25 percent of 10 is 4). This is an appropriate quantitative measure that you can use to establish baseline limits on your number of transactions. It assists you much like budgeting and saving, except that it limits your quantity and not your fiscal expenditure. According to your planned expenditure, you can modify the 50-25 rule to further expand or contract into the 50-50 or the 50-10 principles as well. Therefore, these two techniques of behavioral economics are instrumental useful in helping people transact their priorities and not prioritize their transactions.

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