status quo bias

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How does an online retailer spur impulse purchases? After all, there is no physical store to design in ways that pry open pocketbooks. Amazon uses technology, primarily its one-click purchase button. Meanwhile, Zappos (a company that understands customer behavior as well as any) uses psychology. Namely, it offers free two-way shipping. Free one-way shipping is nice, but it usually costs money to return a product. Zappos eats that cost in order to promote more “maybe” purchases. After all, it’s easier to return than at a store. Thanks to a status quo bias, more “emotionally unready” customers likely keep their impulse dresses than return them.

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Assorted links

1) Has a Nudge blog reader ever used gmail’s “undo send” option? It’s a five second cooling off period after sending an email. Better act fast. (Hat tip: Adam Singer)

2) A former judge wants to see more ignition-interlock devices. (Hat tip: Devorah Segal)

3) What does the status quo bias have to do with Keeping Up with the Joneses? Hint: One man continued to get up and go to work after he got laid off. (Hat tip: Free Exchange)

4) The IMF profiles Daniel Kahneman, who recounts this fascinating story: (Hat tip: Amol Agrawal)

An early event in Nazi-occupied Paris that he remembers vividly left a lasting impression because of varied shades of meaning and implications about human nature. “It must have been late 1941 or early 1942. Jews were required to wear the Star of David and to obey a 6 p.m. curfew. I had gone to play with a Christian friend and had stayed too late. I turned my brown sweater inside out to walk the few blocks home. As I was walking down an empty street, I saw a German soldier approaching. He was wearing the black uniform that I had been told to fear more than others—the one worn by specially recruited SS soldiers. As I came closer to him, trying to walk fast, I noticed that he was looking at me intently. Then he beckoned me over, picked me up, and hugged me. I was terrified that he would notice the star inside my sweater. He was speaking to me with great emotion, in German. When he put me down, he opened his wallet, showed me a picture of a boy, and gave me some money. I went home more certain than ever that my mother was right: people were endlessly complicated and interesting.”

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