ARBUS202 Lecture Notes - Lecture 6: Caveat Emptor, Airbrush, Burberry
20 Mar 2016
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Intrinsic value: value that is not market value. Caveat emptor: buyer beware (prudential claim: sucks to be you, you bought it without doing research. Sellers cannot: act fraudulently, act in bad faith. Seller knows that buyers know the car is junk. Asymmetrical information: at used car dealerships, buyers may not know the car is junk, the princess bride, the dr. oz effect. Buyers want information, sellers want to keep information hidden. difference versus 42% and 3. 4% off. Consumers think they have some control but not really. Remember the blind spot bias: you know that you could make mistakes but you think, no, it"s fine, i wouldn"t . Ads affect how we perceive ourselves and value ourselves as people: ex. We airbrush all the icky stuff and leave the nice stuff. With enough repetition, it"s easy to believe.
