The relativity of values causes us to use money irrationally. I go to the supermarket to buy a $15 pen, and the clerk smiles and says, “You can buy this pen for $7 if you walk 5 minutes from here.” Then, most people walk five minutes and buy a $15 pen for $7. But if you want to buy a $1,000 jacket and the clerk smiles and says, “You can get a $992 jacket in five minutes from here,” most people simply buy the $1,000 jacket. Reasonably, walking for 5 minutes equals the effort, and the profit of $8 is the same. However, people might go to a store that sells pens cheaper, but not for the jacket, because the discount rate is too low. In other words, the relativity of comparing values makes us act irrationally. The pen’s discount rate is 55%, and the jacket’s is only 0.8%. Yet, the total amount is the same for all $8, and the effort to gain that profit is identical. Attitudes and misconceptions about consumption influence how we build wealth. - Joseph’s “just my thoughts”
A cook’s genuine passion for food reflects the value and quality of their creations. Even when the taste is terrible, the cook’s heartfelt effort might still elicit a belief that the food is healthy. Traditionally, this might have made sense, but from a scientific standpoint, it is absurd. Despite knowing proven cooking methods, many chefs continue to rely on their instincts, often without questioning their approaches. Few chefs actually consider the trustworthy resource of food quality, fearing that acknowledging this might label them as inferior chefs. - Joseph’s “just my thoughts”