I've been traveling a bit the past couple of weeks. This gives me time (way too much actually) to sit in airports and observe economic and seemingly non-economic behavior. In particular I noticed two decision-making opportunities. I'm sure there were many, many more going on around me, but these caught my attention.
The first involved a traveling family - mom and dad and two young boys. To all appearances they had been traveling a good part of the day, and it wasn't over yet. There were two boys, both quite young (I estimate less than six years of age) and they were somewhat cranky. Upon seating themselves in the waiting area, the parents were trying to get their thoughts together for the next stage of the voyage. The boys were trying to go in different directions to see different things, and clearly needed a distraction. One parent pulled out a large sweet treat, which caught their attention.
At this point, I was asking myself, "Had this decision been thought through economically?" By that I mean had the parent considered the longer-term consequences of the choice that was just made? On one hand, the boys quieted momentarily to enjoy the snack. But what would be the longer-term consequence of giving the two young travelers, already wound up either from excitement or lack of exercise, a sugar rush -- especially as they were about to enter an airplane where they would be confined for another period of time (of unknown length if we look at recent news stories)? Was this a "good" decision?
The other decision-making opportunity arose when it was announced that a particular flight was in an oversold position, and the airline was willing to give vouchers for a free round-trip ticket, anywhere that they flew in the continental U.S., if one would only give up his or her seat and agree to fly out on the next scheduled flight (which was one and a quarter hours later). I saw only one person stand up and move to the counter to take the offer. I was trying to make a connection, which precluded my taking advantage of the offer. But of the given manifest of passengers, I wondered how many of us reasonably qualified for the offer. By that I mean, how many of us would not miss flights, meetings, etc. and could take the offer?
I then wondered why there weren't more apparent "takers" on the offer. My guess is that the dollar value of the coupons could equal $400 (or less). And how many would have considered the offer if it were in cash.
Can examples like this be used in the classroom to illustrate how/why we make decisions, and how people weigh their alternatives (and opportunity costs) in a decision-making matrix? Do people actually make "informed" decisions? Your thoughts are most welcome.
Posted by TSchilling at 12:58 PM Comments (0)