I wrote about the difference in cost between US Mobile and Verizon because I was blown away by the cost differential for the same service. Even if US Mobile was somehow worse such as customer service or whatever it may be, it is still a functional phone service provider for a fraction of the cost.
Everyone hates inflation when its forced on them at the shelves at the grocery store or inevitably when they get their 2024 insurance premiums, but we often choose the higher price even when given a better priced option. To give people the benefit of the doubt they may just be unaware. Maybe they didn’t find the alternative, didn’t understand it, or just wanted to go with familiarity. Ending any form of relationship is generally awkward and annoying, so maybe it is the fault of the switching process that deters savings; the savings to effort just isn’t worth it.
How many of our expenses in life are self inflicted?
Convenience is a giant driver in the price of goods. A clear example of this is the sliced fruit at the grocery store. People buy half of a melon already cut for double the price of a whole melon just feet away.
A lack of thrift is spotlighted in many areas of life such as staying at your bank offering less than 1% interest when there are better banks offering greater than 4%.
Brand loyalty could also attribute to the acceptance of rising prices. Some iPhone users accept higher price tags on their phones to the alternatives for the sole reason of an aversion to green texts.
So many times, we complain of higher prices, but choose the highest price anyways. To be fair there are nonmonetary values we place on these products and services. After all, price is not the only factors of a purchase. We could reverse every bullet above:
Convenience may be your only option if you had no time before the event to slice the fruit yourself. You may even have opportunity costs where convenience prices save you money allowing you to stay at work and help one more client.
A lack of thrift could be a result of the mental gymnastics required while deciphering the better deal, or the time/know-how to figure it out. In fact, ignorance is bliss in many cases.
Brand loyalty obviously has nonmonetary aspects associated such as the familiarity you have with a service or even additional ties with other product you own. An electrician with all Milwaukee tools isn’t going to buy a DeWalt drill when they need a new one just because it is $20 cheaper. If they did, all of the batteries for their other tools wouldn’t be compatible.
(DeWalt it the way to go if you were curious.)
Whether inflicted for good cause or not we still choose the higher priced product time after time and show no sign of changing.