Consider Ellen Ruppel Shell’s “Cheap,” Chris Anderson’s “Free” and the story of the one-cent Hershey’s Kiss. This story appears in both books, but the versions are different. Both come from the same source, but these two authors can’t even agree on what to call him. He is Daniel Ariely to Ms. Shell, Dan Ariely to Mr. Anderson, and the author of “Predictably Irrational” to both of them.
Mr. Ariely did an experiment that used chocolate to dramatize the difference that a small shift in pricing could make. According to “Cheap” he offered his subjects a choice between the 1-cent Kiss and a 26-cent Ferrero Rocher hazelnut. At those prices the test subjects were divided 40 percent to 40 percent, with 20 percent opting for neither. Then the prices came down by one penny each, and 90 percent of the subjects took the free chocolate. Only 10 percent chose the higher-priced brand.
Off we go to “Free,” playing fast and loose with different facts and telling the story in somewhat zingier fashion. “Note: behavioral economists have limited budgets and limited time,” writes Mr. Anderson, the editor of Wired magazine and author of “The Long Tail.” “So a lot of their experiments involve a folding table, candy and random college students.”
In its “Free” version the non-Kiss candy is a Lindt truffle initially priced at 15 cents while the Kiss cost a penny; 73 percent of subjects chose the truffle and 27 percent picked the Kiss, with nobody abstaining. Then the prices were lowered by 1 cent each, and 69 percent of the subjects chose the free Kiss. Mr. Anderson doesn’t bother to account for the rest of the sample group, but he does use a quotation from Mr. Ariely to bolster the case that his “Free” makes: “Zero is not just another price, it turns out. Zero is an emotional hot button — a source of irrational excitement.”
Irrational is an apt word, what with the above-mentioned discrepancies. But what’s the upshot of either version of the experiment? And which book can be trusted? Bear in mind that Mr. Anderson has lately been called to task for making uncredited use of free Wikipedia material. But also realize that “Cheap” refers to the Ponzi scheme of the disgraced financier “Michael” Madoff and includes the following thought, which Ms. Shell means to apply to discount shopping: “Actually being eaten by a saber-toothed tiger was not what got early man running; it was the dread of being eaten by that tiger.”
So neither author is entirely to be trusted. Neither was well-advised to use that chocolate story. And neither has written a book that is as sharp as its one-word catchy title. Ms. Shell’s “Cheap” touches very predictable bases in describing and lambasting discount culture (or as she would rather label it, Discount Nation). She parses the obvious and addresses her book to consumers, often drawing upon personal experience to tell them more than they need to know. (Her 3-for-$15 underwear from Target shreds in the dryer.)
Ms. Shell also relies so tediously on quotations from academic experts that she needs to bring a professor of marketing to a Nevada outlet mall to tell her that its bargains are phony. Surprise: The mall’s excitement is not as galvanizing as a saber-toothed tiger would be.
Ms. Shell deals with the mundanity of shopping from the consumer’s point of view. Mr. Anderson peers into the future and aims his arguments at the business world. Here is what he means by “Free”: If you want to know what he really thinks, you’re going to have to pay for more than his book. He acknowledges that he is giving his book away online, as well as selling it at the not-free price of $26.99, so he can be hired for much more lucrative speaking and consulting jobs.
“I’ve got a lot of kids, and college isn’t getting any cheaper,” he writes. He is sufficiently crass, reckless and lazy to have had someone else read the science-fiction books he uses to illustrate the perils of scarcity and abundance.
Still, Mr. Anderson has come up with a lively conversation piece. Even when the particulars of his argument are easily assailable, the gist is clear: Now that a cornucopia of Internet material has been made available without fee, and in some cases without scruples, the smart business must find ways to adapt to that new reality. “The way to compete with Free is to move past the abundance to find the adjacent scarcity,” he writes. And “Free” is full of specific examples of how to do just that.
But after beating the drum for giveaways throughout most of his book, Mr. Anderson eventually acknowledges that his idea is in fact not viable. Such are the perils of his sloppily constructed sweeping argument. No, he doesn’t envision an economy based entirely on giveaways. “Free may be the best price, but it can’t be the only one,” he says. He advocates the balancing of differently priced versions for different markets, acknowledging that this tricky balance is not easily achieved.
Mr. Anderson sees that consumers think not only about money but also about intangibles like convenience, access, quality and time. Ms. Shell’s intangibles are different; she argues that moral accountability and responsibility are often sacrificed for the sake of cheap pricing. But her self-righteousness can backfire.
At the end of a chapter largely devoted to the horrors of Asian shrimp farming, she describes being in a Red Lobster restaurant with friends and being enlightened enough to eschew cheap shrimp in favor of chicken. Yet cheap chicken-farming isn’t any less ghastly. It just doesn’t happen to be addressed by this book.
Alan Davidson is the founder of ThroughYourBody.com and the author Body Brilliance: Mastering Your Five Vital Intelligences, the #1 bestselling Health & Welness book and winner of two National Book-of-the-Year awards.
Alan is also the author of the Free report “Body Breakthroughs for Life Breakthroughs: How to Peak Your Physical, Emotional, Mental, Moral, and Spiritual IQs for a Sensational Life” available at www.throughyourbody.com
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