It’s Black Friday, which means it’s time to line up at the crack of dawn in the cold fall weather and wait for the stores to open. It means sales, and for a behavioral economist, a “sale” can be a nightmare. You, the consumer, think you are getting the best deal out there, but of course companies are using the “sale” as a come-on to lure you into making bad decisions and to leave the store with a $400 peacoat you’ll rarely wear, an espresso machine you’ll never use, a movie picked up in the checkout aisle that you’ll watch once, and a stainless steel toaster — because it was “half off” — even though the one you have works just fine.
So when I called Dan Ariely, a behavioral economist at Duke University who studies consumers’ spending decisions, I was expecting something — anything — other than the injunction with which he began our conversation.
“I think people should go and celebrate on Black Friday,” Ariely said.
Celebrate and spend money willy-nilly? Coming from a behavioral economist, the advice sounds counterintuitive, if not perverse.
But an experiment conducted by Ariely and his team at Duke’s Center for Advanced Hindsight suggests otherwise. Here’s the premise: A couple has the habit of going to a cheap restaurant every Tuesday without fail, where they buy cheap food and wine. One Tuesday, however, they decide to splurge, and go to an expensive restaurant instead, buying expensive food and expensive wine.
“Let’s call that day ‘special restaurant day,’” said Ariely.
The question is: What do they do the following week?
It’s true, said Ariely, that “when people increase their spending on a random day of the week, they are more likely to increase their spending in the future.” But, and here’s the kicker, “If they increase their spending on a special day” — in this case a “special restaurant” Tuesday — “they usually go back to their normal habits.”
If you find that rather curious, consider Ariely’s analogy of dieting. “One of the biggest lessons in dieting is that we want to have a cheat day. And we know that if we don’t have a cheat day, we will eat badly all the time.”
So by splurging and indulging ourselves on a special day — on a holiday, on a vacation, on an anniversary, on a “special restaurant Tuesday,” or on Black Friday — we give ourselves a cheat day. Afterwards, it appears that most people return to their normal habits. But if we were to, say, buy an expensive dinner with expensive wine on just any day of the week, or splurge randomly when a “sale” sign suckers us, we are “self-signaling” that we are the type of person that goes to fancy restaurants regularly, or “saves money” on sales.
“If you do something in your natural habitat, it becomes part of your repertoire,” said Ariely. “If you do it separately, then it’s not me, it’s just Black Friday.”
Newly convinced I should buy that très cher peacoat I’ve been eyeing, I turned the conversation to the motivation behind a company like outdoor equipment retailer REI that announced its stores wouldn’t open on Black Friday at all. Why would a company close down on the biggest shopping day of the year?
“If you think of it as a diet, people want ice cream on their cheat day,” Ariely said. In other words, we want to indulge. So a company selling, say, cleaning supplies, has no need to be open on Black Friday.
Similarly, “opting out” of Black Friday, or “opting outside,” signals something about the REI brand. In a recent NewsHour story on a similar company, Patagonia, Paul Solman explored the sales pitch in Patagonia’s newspaper ad, “Don’t buy this jacket.” The pitch was for product utility, endurance — the furthest thing from indulgence or ice cream. (Patagonia is open on Black Friday, however, and offering its usual sales.)
But whether you decide to opt outside or continue along your Black Friday shopping tradition, Ariely’s early findings create a convincing argument for allowing yourself a (special) one-day splurge.
“Now that’s not to say you can’t make stupid mistakes,” Ariely adds.
Which means that, behavioral economics notwithstanding, the question remains: To indulge, or to not indulge in the few hours you have left.
Editor’s note: An earlier version of this article stated that Patagonia had Black Friday sales. It has since been updated to clarify that Patagonia didn’t have any special sales for Black Friday.