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Image credit: Stocksnap

An accidental behavioural economist on holiday

(Behavioural) economics lenses don’t stop working when you’re on break, it seems

It is sometimes said that “economics is the study of human behaviour”. (A Google search of this exact phrase produces over 30,000 hits, so it’s manifestly not just me.) And what better time to observe and study human behaviour than when you’re on vacation? Last year, I wrote about a stroll along the beach, providing several examples of intriguing ways in which (behavioural) economics explains why people do what they do. This year it’s not the beach but shops, streets and boats that provided the inspiration.

The closed greengrocer’s

One advantage of staying in the same place every year — a tiny 4th floor flat (no lift) in a seaside town — is that you become so familiar with the environment that it feels like home. The cognitive load reduces with every subsequent year: no stressing about finding the shops, the best places on the beach, where to leave your car etc. And on holiday or not, the status quo bias applies regardless.

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The imminent fate of the baker? (Photo: Christophe Frot/CC)

Car parking… expensive, or cheap at the price?

On-street car parking in the area costs €15 (close enough to £1 these days!) per day. Not a huge amount, but if you’re staying a week it’s the cost of a decent meal for two. Being cheapskates we left our car about a mile away in a street with free car parking. Not everyone didn’t, though. On the way to the alternative grocer’s we saw a car parked for days on exactly the same spot, obviously unused all that time.

Reputation and risk pricing

We tend to be quite attached to our reputation, and we’re willing to make sacrifices to protect it. But even if we like to think we have a good name, its worth is really in the eye of the beholder.

The value of time

Mental accounting is not just for money, as our experience disembarking from the ferry on the way back home illustrates. It takes about 15 minutes from the first to the last car to leave the ship. That appears like a lot, and it can be hard to suppress your resentment when you see cars get back to solid ground before you, if they boarded after you. By sheer luck they ended up in a lane that gives them unfair lead of as much as perhaps 2–3 minutes compared to you!

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The annoyance of waiting (photo: Gary Bembridge/CC)

Written by

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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