Not Thinking About Money Has a Value All its Own
Contra Squarely Rooted, people absolutely want to be bonds. He notes that most of the hot new businesses these days work on a subscription pricing model, where customers pay a flat fee rather than a la carte. Often the a la carte option would be less expensive, but people are willing to pay a premium for not having to think about transactions. One way to interpret this is that companies are exploiting consumers’ cognitive biases and that consumers are fools for paying more than they need to. I don’t think this is a helpful way to look at it.
Choice fatigue isn’t some illusion that goes away once you know about it, choice fatigue is real because we feel it. Personally, I hate having to think about microtransactions and paying for metered services. It’s irritating and the irritation of constantly knowing I’m losing sums of money (albeit small sums!) far outweighs the comfort of knowing I’m saving small amounts. And I’m obviously not the only person who feels that way, because consumers are voting with their feet.* I think that the general dislike of a la carte pricing comes from natural loss aversion – which is to say people assign more emotional weight to losing a given sum (e.g., a microtransaction) than they get from gaining a given sum (the savings earned vs. fixed-fee pricing). I’m frankly willing to pay a little bit more for a given fixed-fee service to not have to worry about what I’m actually spending.
I wish I wasn’t that way, but I don’t get to shape my own preferences and cognitive biases. I think the trend towards fixed-fee services is best viewed as substantially enhancing overall welfare. Consumers get greater surplus, providers get greater surplus (profits) – what’s not to love?
*: Or whatever the digital equivalent is.