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The incentive of “free”: Does “free” transcend value?

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A few days ago, someone offered three individuals free tickets to an upcoming flea market (hamfest).  The tickets, with a face value of six or eight dollars, plus the offer of a $300 prize, was turned down by two of the three people.  To the person making the offer, the turn down of the offer of “free” was incredulous.  Why would any rational person turn down “free’?

I meet a lot of unique and interesting individuals.   A few years ago I got a good and unexpected lecture on “free”.  In preparation for the analog to digital conversion of television the government was giving away vouchers to help pay the cost of an analog to digital converter box for those who had analog televisions.  If I remember correctly, the vouchers were worth $40 towards the cost of the converter box which was priced at about $50-$70.  So, with the voucher, the final cost of the analog to digital converter box was about $10-$30.  When my voucher arrived in the mail I used it to purchase a converter box for a family member.  I already had a digital television.

Why take something for free when you can afford to pay?

When I told a particular individual that I used the voucher I got a big lecture.  He told me I could afford to pay the full price for a converter box.  And he asked me why I would use the voucher.   To him, it was like I was taking something that did not belong to me.  It was like using another persons money to subsidize the cost of the converter which I could afford to purchase without the subsidy.  I should also note that this person does not collect social security even though he is eligible.  He says he does not need it and won’ take it.

So you wonder… who takes things for “free” even when they don’t need it?  It seems to me that more and more people are taking things for “free” no matter what it is and no matter who has to pay for it and whether you need it or not.  When does your conscience kick in to think things through and decide that there is no such thing as “free” – that there is always a cost (to someone) or a lost opportunity to someone or some group.  It’s hard to embarrass people these days for taking something for “free” even when they don’t need it.  “Free” mesmerizes some people.

Sometimes “free” backfires and creates exactly the opposite of the intention.  What some marketing people have discovered is that “free” sometimes devalues things (the “freebie devaluation effect”).  If it’s “free” it may not be worth much.  Price signals value to consumers whether as truth or as a misdirection.

So, the incredulous person above still has two of the three tickets still available – for free, and perhaps more tickets.

Two other incredulous people are wondering why “free” is an incentive if you don’t want it in the first place or why “free” is a viable option when you can afford to pay and contribute to the fund-raising of an event.  Is “free” some magical attribute that infuses value into a thing that you would not pay for in the first place?  What’s the value of the thing when you have few takers even when you try to give it away at zero cost?

Read related articles –

The New American Dream
Why is it so hard to embarrass people

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Written by frrl

April 26, 2012 at 5:26 am

Posted in Uncategorized

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