Dividends and The Internet Trap

One of the internet providers had an advertisement slogan is Where will you go on the Internet or it was featuring one of the great things about the internet – if you are curious about a subject you can learn or find information till your heart’s content. You can find others who are interested in subjects you are interested in and you can be a more informed person. Most people including me are sometimes curious about subjects, but not 7 days a week. Sometimes seemingly mindless activities are equally as important. It is the seemingly mindless activities that a book was written about the subject. The book is called The Internet Trap by Ashesh Mukherjee published by U of T Press, Toronto, 2018. The author is an Associate Professor of Marketing at McGill and can be reached at ashesh.mukherjee@mcgill.ca.

Mr. Mukherjee uses the latest research in consumer psychology to highlight the 5 hidden costs to living online – Too Many Temptations, Too Much Information, Too Much Customization, Too Many Comparisons and Too Little Privacy.

Too Many Temptations

Desire is the wish for something – the stronger the wish, the greater the desire. Most of do not live in ideal world, we live in the reality we have based on our income. When you look for things on the internet, the presentation will be in the ideal world and thus the gap between the ideal and the actual strengthens our desire to spend money and time online.

Our minds are wired to keep the ideal above the actual state through a psychological process called the hedonic treadmill (Loewenstein, 2005). This state helps explain why we upgrade to the latest model even though the model we have works fine.

The internet makes us vulnerable to temptation by reducing self control. The self control is often lower because of goal clarity, the foot in the door effect, lower energy and product pricing on the Internet.

If you are browsing the internet without a particular reason you will often go on tangents. The more you browse the higher the opportunity to buy on impulse.

The foot in the door is the psychological process whereby taking a small step towards an object increases the chances we will take a bigger step towards the same object later. One method used by car sales people is – you are interested in the price of a vehicle. The sales person offers you a lower rate than expected, you fill out the paperwork. The sales person goes to his/her manager and the manager says no to the price and says the final price is higher. Many people say yes to the higher price because they filled in the paperwork.

The greater you energy, the more self control you have. If you browse and are tired, the chances are higher you will buy on impulse.

As consumers we love all inclusive. We think we will take advantage of all the offers, later you find out life came in the way and we only take advantage of some of the features.

Linking to dividend paying stocks, the above helps companies sell products which makes profits. An aspect of every consumer retailer is to have an active internet site which increases sales, this is good for the company. It may not be great for the consumer, but you want to ensure companies are doing what is necessary to have consistent sales to make profits. How does their internet site enhance the company?

There are more questions than answers, till the next time – to raising questions.

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