Nov 26, 2019 06:00:00

“People can no longer tell the price of things,” and why?

by

vadymvdrobot

An analysis of a quiz program that guesses the price of a product that has been broadcast for nearly half a century has revealed that “people are no longer able to quote the price of goods”.

Inattention and Prices Over Time: Experimental Evidence from 'The Price Is Right' (1972-2019) by Jonathan Hartley :: SSRN
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3469008

Why are people getting worse at 'The Price Is Right'? — Quartz
https://qz.com/1740513/why-are-people-getting-worse-at-the-price-is-right/

Price Is Right Contestants Have Apparently Gotten Worse Over Time, According To New Study
https://www.cinemablend.com/television/2484434/price-is-right-contestants-have-apparently-gotten-worse-over-time-according-to-new-study

' The Price Is Right ' is an American longevity program that started in 1972. Four contestants predicted the price of consumables such as electrical appliances and towels, and the winner who continued to expect the most correct answer was the new car It is a game program that you can get premiums such as.

Jonathan Hartley, who studies economics at

Harvard University Kennedy School , aggregates about 120,000 price predictions that the participants answered in 'The Price Is Right' broadcasted between 1972 and 2019 And analyzed the accuracy. The result is the graph below, where the vertical axis represents the difference between the expected and correct answers, and the horizontal axis represents the age. According to Hartley, the error was an average of -8% in the 1970s, and the contestants offered a price that was 8% cheaper than the correct answer. In the 2010s, this difference expanded to an average of -20%. That's it.

Mr. Hartley believes that the price forecast by the participants of 'The Price Is Right' has become far from the actual price, which is roughly divided into three economic factors. The The first is “convergence of

inflation ”. From the 1970s to the 1980s, American inflation was very high and prices were not stable. High inflation means that prices will be pushed up, so people at that time were more sensitive to price increases than in recent years, and they were interested in how much the prices of goods increased. Hartley thinks.

The second factor is the rise of e-commerce . According to a survey by Harvard Business School economist Alberto Caballo, the price of mail-order sales via the Internet as represented by Amazon.com and the selling price at actual stores are shrinking year by year It turns out. Hartley sees that this situation can reduce the sensitivity of people to prices as a result of eliminating the need to compare online and offline prices.

The third factor is “increased product types”. According to a study by Boston University law school economist James Bessen, the types of products handled by supermarkets have increased 50-fold over the past 80 years. This is due to the fact that corporate strategies are shifting to differentiation by producing a variety of products rather than price competition. As a result of the increase in the types of products on the market, Hartley believes that the number of products that are not familiar to the participants of “The Price Is Right” has increased.

by Kamalakannan PM

The news site CinemaBlend , which specializes in information on TV programs and movies, guesses why the contestants of `` The Price Is Right '' have become disappointing from a slightly different perspective than Mr. Hartley, an economist doing. By Ted Slauson who was a big fan of “The Price Is Right” since childhood and became the protagonist of the documentary movie “ Perfect Bid: The Contestant The Know Too Much ” who knew the trend of questions and the price of the product. And the early 'The Price Is Right' often asked the same product. However, since the question was changed around 2008 and the same product was no longer given, it was difficult for contestants to get the price right.