Our minds make sense of the world by making comparisons. For instance, how do you tell if something is cheap or expensive when shopping? It’s mostly by comparing it with other products, isn’t it? And so it happens for everything in our lives: we’re constantly comparing — everything, all the time.
It’s true that making comparisons is human nature, but judging everything only through comparisons can get us to think irrationally and make bad decisions. It eventually makes us feel miserable when we realize that our choices weren’t really that good, after all.
Learn how this mind trap works and how to escape it.
Relativity in Our Daily Lives: Pens and Suits
Picture yourself in the following situation: You have two errands to run today — buying a new pen and a new suit for work.
At an office supply store, you find a nice pen for $16. You are set to buy it, but you remember the exact same pen is on sale for only $1 on a closeout 15 minutes away. Do you buy the pen for $16 or go for the $1 one?
OK, on to your second errand: Let’s go get your suit. You just found a nice suit for $500 and while waiting for the cashier, another customer tells you that you can find the same suit for $485 on a store just 15 minutes away. Do you buy your suit for $500 or drive 15 minutes for the $485 one?
Take a moment to think about your choices. What would you have done?
A similar situation was presented to a group of people in a study (by Amos Tversky and Daniel Kahneman, the same brilliant guys from another great famous framing experiment). The results? They found that most people chose to drive to buy the cheaper pen, but happily parted with $500 for the more expensive suit.
What’s going on? Can you spot the contradiction here?
A Dollar is a Dollar is a Dollar — Or Is It?
Clearly, our minds are fooling us. In both situations your choice boils down to saving $15 or 15 minutes of your time: The absolute price of the item you’re buying has no importance whatsoever (and is the red herring used in the experiment to elicit the contradictory behavior the researchers were looking for).
Whether you save $15 from buying a pen, a suit, a car or a luxury yacht, the end result is the same: $15 in your pocket. The only question that matters here should be: “Is 15 minutes of my time to save $15 worth the $15 I’m saving?”
What’s happening here is that your mind can’t decide, without external aid, if a $15 discount is a good deal: it needs something else to compare the discount to (in this case, the total price of the item).
And this is the problem: we look at things in life relatively, comparing differences, instead of looking at each thing’s value on its own.
Making comparisons and evaluating things relative to each other is a many times a useful shortcut, but as demonstrated above, in many occasions it severely hinders our ability to make wise decisions.
Relativity Traps are Everywhere
Not surprisingly, relativity kicks in not only when buying pens and suits but in almost everything in life.
Relativity, along with the bad comparisons it entails, can make you feel bad about yourself, get you in debt, and lead you to make life-changing decisions that are just plain stupid. In short, it can make your life miserable.
The examples are countless; here are just a few.
Comparing yourself with others. This is a biggie. If you assess your worth by comparing yourself with others (in any dimension you choose to use), you’re set for disappointment: there will always be people better than you in any measure you pick. I’ll further explore this theme in a subsequent article, but for now it suffices to repeat something you already know: avoid comparing yourself with others; it’s always a no-win situation.
Keeping up the Joneses. The richest person in a poor neighborhood is usually happier about his net worth than the poorest person in a rich neighborhood — regardless of how much they actually have! In light of relativity, people compare themselves with their neighbors, and don’t like the feeling they’re behind “everyone else”. This is an endless cycle: the more people have, the higher they set the bar for the people they compare themselves with.
Winning (and feeling like you lost). Isn’t it true that the silver medal usually tastes bitterer than the bronze medal? Despite the absolute value of the medals, earning the silver medal usually comes in the context of failing to win the gold one. The bronze medal, on the other hand, is earned in the context of getting any medal instead of no medal at all.
Taking advantage of “great deals”. It’s a well-known sales technique to offer customers the most expensive products first. Those overpriced items establish the context for people to see the other products as being cheaper. Oftentimes those “cheap” products are not cheap at all, but thanks to relativity, you walk away thinking you made a great deal. (Note, though, that you paid the ‘absolute’ amount of money for your product! It may be relatively cheaper but you may have parted with a great deal of your hard-earned money, anyway.)
On the flip side, people may go for the more expensive item because the difference in price to the less expensive one doesn’t look as big. People find it easy to spend $3,000 on leather seats for their new $25,000 cars (the $25,000 serves as the comparison number), but have a hard time spending the same amount on their living room sofas (that usually don’t have a clear figure to be used for comparison).
How to Overcome the Relativity Trap
Is it possible to escape the mind trap of relativity”? Dan Ariely, in his brilliant book Predictably Irrational (from which I got most of the inspiration to write this article) hints at the solution.
The way to escape thinking in terms of comparisons and relative terms, is — not surprisingly — thinking more in absolute terms: you got to escape the trap of doing local comparisons and think more broadly.
Going back to our example of buying the pen and the suit: Resist the temptation of looking at the $15 savings relatively to the item’s total price (the immediate, most salient comparison). Escape that local comparison and put the savings into a broader context instead. Ask yourself ‘What can I do with the $15 saved?‘ and see how that can better inform your choices.
Maybe you will buy a book? Save the money? Donate it to charity? Moreover, ask yourself: “Is $15 worth a drive downtown and 15 minutes of my time?” In short, see beyond the immediate situation.
In 15 minutes, maybe you can go back to work and earn more than $15? Or maybe a 15-minute break is what you need right now? Regardless of which way you decide, remember: this has nothing to do with the price of the pen or the suit, but with what you are actually saving (time? money? hassle?) means to you in a broader context.
This was an easy example, but if you think about it, you can apply it to just about everything in your life. How about stop comparing yourself with others and assess how you feel about your life broadly — on your own terms? How about focusing on the value of your silver medal instead of the other guy’s gold medal?
Think outside your immediate context, escape easy comparisons and start seeing things in a broader perspective. When you think about life this way, everything can be seen under a new — much more positive — light.
Try it: make notes of some of your important decisions (and some of the not-so important ones) then write down your impressions from a relative as well as an absolute perspective. Are your decisions better one way or another? Why? How?
While simple in theory, thinking in absolutes is not the way we’re wired to think, so doing it always takes a great deal of conscious effort and practice. But it’s absolutely worth it.