« You Aught To Remember: Torture Porn |
Main
| Face Of The Day »
14 Nov 2009 07:29 pm
Double The Tips
Sager highlights a story about NYC cab drivers being required to let customers pay with credit card. The cab drivers resisted but are now making more money as a result:
The story boils down to loss aversion blinding the cabbies to two
salient facts about credit cards: 1) They make people spend more, 2)
They can be programmed with “default” tip amounts much higher than what
drivers were typically receiving with cash.
The effect of credit cards on our spending is particularly striking.
I think we all have an intuition that plastic makes us spend more. This
study (PDF)
shows that people will bid more than twice as much for an item (in the
experiment, NBA tickets) when allowed to pay with credit card instead
of being restricted to cash — far more than even I would have guessed.
Share This
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d83451c45669e20128759a1a39970c
Listed below are links to weblogs that reference 'Double The Tips'
