Why supersizing works

upsell.jpgIt's what economists call "default bias," which basically means that when people are given an option that is easier to select, for whatever reason, they'll choose that option. This is why fast food chains have such success with upselling - when the cashier asks if you want fries with your burger, the temptation is to nod yes because it's easier when someone else is choosing the option for you. But default bias can work the other way, as we're seeing with NY Mayor Michael Bloomberg's controversial plan to ban large-size sodas. The ban applies to those monster 32-ounce servings - the largest size that restaurants, sports arena, delis, and movie theaters are allowed to sell is 16 ounces. Yes, you can buy two, 16-ounce cups, but that would be a hassle. The default bias would be to buy only one cup. From the New Yorker's James Surowiecki:

If you offer a choice in which one option is seen as a default, most people go for that default option. People who are automatically enrolled in a retirement plan, for instance, are more likely to stay with their original plan than those who choose plans for themselves. In countries where people have to choose to be an organ donor, most people aren't donors; in countries where people have to actively say they don't want to be an organ donor, most are donors. The soda ban makes sixteen ounces or less the default option for soda drinkers; if they want more, they'll have to make an extra effort.


An executive at the American Beverage Association has dismissed the plan, saying that "150 years of research finds that people consume what they want." Actually, the research shows that what people "want" has a lot to do with how choices are framed. In one well-known study, researchers put a bowl of M&M's on the concierge desk of an apartment building, with a scoop attached and a sign below that said "Eat Your Fill." On alternating days, the experimenters changed the size of the scoop--from a tablespoon to a quarter-cup scoop, which was four times as big. If people really ate just "what they want," the amount they ate should have remained roughly the same. But scoop size turned out to matter a lot: people consumed much more when the scoop was big. This suggests that most of us don't have a fixed idea of how much we want; instead, we look to outside cues--like the size of a package or cup--to instruct us.


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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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