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Stephen Garcia: We have actually done several studies on the Presenter's Paradox and what
we are finding is suppose you want to give a loved one a present for the holiday season
and suppose you think, well, I am going to give them a luxury Kashmir sweater, but you
also know that they enjoy coffee, and so you also think well, gee ***, I think I am going
to give them a $5 gift card. And so you bundle that together.
Norbert Schwarz: Unfortunately, Steve maybe missing a crucial part. It may be is that
if I am your uncle who gets your Kashmir sweater and a $5 gift card, I'd say, gee, that's a
nice big gift when I look at the Kashmir sweater, but may actually say, now this is a cute little
gift card. And somehow this big gift and this little gift on average turn in to a less generous
gift, since a Kashmir sweater alone might have been.
Stephen Garcia: That's basically what we looked at in our studies. So in one of our studies
we asked people to imagine that they are in charge of the marketing campaign for Apple,
and we asked them, suppose you are having a campaign around the iPod and what you want
to do is you are going to give them an iPod case, as well as the iPod. And the question
is do you also include an additional 5 free songs that they can download from iTunes?
Actually what happens is that when we ask consumers which promotional package they think
is most appealing, they actually think the package that includes only the iPod with the
cover is more appealing, and actually rated as being more valuable, than the package with
the cover, the iPod and the five additional free songs.
Norbert Schwarz: In all of these examples it's the same underlying principle. A person
who puts together as a presentation, who shows the goodies, who samples the gifts, who puts
together as a marketing package, that person essentially follows a more is better rule,
is how that person acts. So I take a big thing and I find a few other good things, and then
I add all them together and do my grab-bag of good things, and I get a big bag of good
things.
But the receiver who evaluates that presentation, and who says, this is really all good or he
says this is really all impressive. That receiver follows a different rule. That receiver looks
at the overall package and sees the big thing and some small things and essentially averages.
And one big thing and a bunch of small things on average, makes some things smaller, since
that big thing alone would have been. So you dilute the impact of your best information
by adding your second best information.