This week’s book learning is from ‘Predictably Irrational’ by Dan Ariely.
After a break from market and social norms, we are back with one (final) interesting observation on market/social norms.
A group of lawyers were asked a question.
‘Would you offer less expensive services to needy retirees?’ Most said No. (i.e. rates are lower than market norms!)
A few days later, they were asked a question.
Would you offer free services to needy retirees? Overwhelmingly, the lawyers said yes. (i.e. purely social norms)
There’s a parallel with a fable about a Sensei in Japan who did not charge the students. Once, a group of students requested him to allow them to pay. Setting down the bamboo stick, the sensei calmly replied ‘If I charged you, you wouldn’t be able to pay.’
The observation here is that in most cases, the middle ground between market norms and social norms is tricky. This principle is often seen in good business strategy as well. You may offer work to a client for free but you never do it at half price.
Would love to hear of any other life/business/work applications of this concept that come to your mind!
Here’s to looking out for more examples of market and social norms in action this week!