A service to quantify your emotional state over time.

To oversimplify for a moment, here’s Penney’s problem. They told the world that retailers only offer their best prices during crazy sales, and Penney stores would no longer host them. Sensible consumers apparently took that information to heart and decided to simply wait for such sales at other stores. As an added benefit, Penney lowered consumers’ search costs, because they now knew they didn’t need to bother driving to a Penney’s store anymore.

That’s probably not what new Penney CEO Ron Johnson had in mind when he decided to spend his marketing budget on those witty DeGeneres ads. A former Apple Inc. executive who took the Penney’s job in November, he thought he was lifting the store out of the brutal commodity clothing market. He may ultimately succeed at that. But he won’t do it by telling customers the firm’s pricing is fairer than at other stores, Gabaix believes.

“It will be a very, very uphill battle,” Gabaix said. “So, sorry for them.”

There have been a few other celebrated efforts by companies to educate consumers that their higher prices are really lower prices after hidden fees. During the last decade, Intercontinental Hotels experimented with up-front pricing that included all fees on its website. Executives at the firm told the New York Times that customers left in droves, choosing competitors with lowball prices.

More recently, Southwest Airlines has undertaken the most aggressive anti-shrouding campaign to date, picking on other airlines’ baggage fees. The profitable carrier is holding its own with its “Bags Fly Free” campaign, but there are indications that the firm won’t be able to resist all that free money forever. In what may be a sign of things to come, Southwest elected to leave AirTran’s baggage fee structure in place after it acquired the competitor last year.

Shrouding isn’t the only reason Penney’s pricing plan is flawed. The firm is also leaving a lot of money on the table by rejecting a phenomenon known as “price discrimination.” Some people have more money than time, and some have more time than money. Some shoppers don’t mind spending hours to save $20; others would gladly give a store $20 to escape quickly. Smart retailers get money from both. By killing couponing, Penney has eliminated its ability to satisfy price discriminators.

And as others have pointed out, markdowns serve the age-old retailing trick of “anchoring.” For some reason, even very smart consumers feel better paying $60 for something if you initially tell them it costs $100, and then reduce the price.

But the real problem is Penney’s ill-fated attempt to cast itself as the only fair poker player in a game of cheats. Shoppers just aren’t buying it. However unsophisticated consumers are, very few of them believe a pair of shoes bought at Penney’s everyday low price will be cheaper than a pair of shoes bought at Macy’s on clearance with a 25 percent off coupon.

Like it or not, hidden fees – and secret discounts – are here to stay.

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"We like to believe that a few bad apples spoil the virtuous bunch. But research shows that everyone cheats a little—right up to the point where they lose their sense of integrity", says Dan Ariely.
Author: Dan Ariely, WSJ, May 25, 2012

Dunning-Kruger Effect

"What this research suggests, however, is that we need to make time to escape from everyone else, to explore those parts of the world that weren't designed for us. It's when we are lost in the wild that the mind is finally at home."

'The latest research on the effects of environment and genetics on personality...'

'Submissiveness and dominance have their effects on the same reward circuits of the brain as power and cocaine. Baboons low down in the dominance hierarchy have lower levels of dopamine in key brain areas, but if they get ‘promoted’ to a higher position, then dopamine rises accordingly. This makes them more aggressive and sexually active, and in humans similar changes happen when people are given power. What’s more, power also makes people smarter, because dopamine improves the functioning of the brain’s frontal lobes. Conversely, demotion in a hierarchy decreases dopamine levels, increases stress and reduces cognitive function. But too much power – and hence too much dopamine – can disrupt normal cognition and emotion, leading to gross errors of judgment and imperviousness to risk, not to mention huge egocentricity and lack of empathy for others.' -- Political power is the dizziness of loss aversion.

"The two-player Iterated Prisoner’s Dilemma game is a model for
both sentient and evolutionary behaviors, especially including the
emergence of cooperation. It is generally assumed that there
exists no simple ultimatum strategy whereby one player can enforce
a unilateral claim to an unfair share of rewards. Here, we
show that such strategies unexpectedly do exist. In particular,
a player X who is witting of these strategies can (i) deterministically
set her opponent Y’s score, independently of his strategy or
response, or (ii) enforce an extortionate linear relation between
her and his scores. Against such a player, an evolutionary player’s
best response is to accede to the extortion. Only a player with
a theory of mind about his opponent can do better, in which case
Iterated Prisoner’s Dilemma is an Ultimatum Game."

via https://twitter.com/thoughtcatalog/status/206067629897691137

If you pay people to complete puzzles instead of paying them for being smart, they lose interest in the game. If you pay children to draw, fun becomes work. Payment on top of compliments and other praise and feeling good about personal achievement are powerful motivators, but only if they are unexpected