Drip Mileage

I've been trying to sort through finishing touches to a collaborative article on behavioral exploitation antitrust in subprime mortgages, and my head is swimming with thoughts of pricing techniques for exploiting cognitive biases. I realized I use similar techniques to get myself to work out.

There's a fair amount of discussion on exploiting loss aversion to encourage reluctant gym-goers. Some have experimented with gym memberships with prices that increase for not going to the gym. To avoid paying more each month, a party to that contract would squeeze in the extra workout.

My own technique is different. I've learned that for reasons I can't quite understand the idea of a long workout is excessively daunting. Even in the best of my running shape, a 10-miler at marathon pace is overwhelming. If it's on the schedule, I might just find a reason not to go at all. ("I've been slow in my writing. Maybe I should spend the afternoon at my desk.") Today I planned to swim, but the idea of a fairly mundane 2000 yard workout might have been enough to keep me home.

The same goes for commercial transactions. $500 round trip is too much to fly to California. $30,000 is too much for a car. But the airline or car dealer may need to earn that much to make a profit. It can engage in "drip pricing," whereby it advertises a ticket for $400 (at or below the consumer's reservation price) and makes up the rest on baggage charges, movie rentals, and seat upgrades (airline); or charges $25,000 and earn more on extended warranties, rust-proofing, and optional features (auto dealer). The Office of Fair Trading published a report in 2009 that concluded drip pricing could cause consumers to pay more than they would in the presence of full up-front disclosure for two reasons. First is increased willingness to pay, whereby a consumer becomes willing to pay more once he or she has become committed to a transaction. Second is confusion, whereby the pricing technique obfuscates the actual price being charged. If I budget $400 to fly to California, having bought my ticket I might well end up paying the full $500 for the flight, either because I become willing to do so or because I don't notice that I am doing so.

I've learned that 10 miles or 2000 yards, or even 1 hour lifting weights, exceeds my "reservation mileage." So I plan a much different workout. Yesterday I laced up with the intent of running three miles or so. That got me into Rock Creek Park and past the startup hurdle. From there it was easy to turn left instead of right, heading up Beach Drive rather than back home. For today's swim I convinced myself I just needed to get in the pool to maintain a twice-a-week swimming program. After a few hundred yards, convincing myself to do a few hard 50s was not a big deal. Then a few became many.

I call it drip mileage. Kind of like a low-muse writing day. Maybe I can't think of anything to say, but I can play with the formatting. And maybe I can tackle that troublesome paragraph . . .