In Shenzhen, China, people ride bicycles almost for free because bicycle sharing companies such as Ofo (yellow) and Mobike (orange) compete each other aggressively.
Thanks to the competition, renting and returning bicycles is extremely convenient. When I subscribed Mobike, I could use app to search for available bicycles nearby. When I met a lonely bicycle on a street, I simply scanned its QR code to unlock and ride it. When I finished my trip, I parked it anywhere I wanted and then scanned its QR code one more time.
Certainly, aggressive competition raises numerous problems. For instance, some bicycles are broken, others are dirty, and the others are even dumped out in the woods! However, competition solves a challenging problem that other bicycle friendly cities failed to address, that is, bicycle theft. Since bicycles are for free in this city, no one is interested in owning or stealing them. A sharing economy, when it truly comes true, could change how we value a product or service.
Psychologists have long claimed that people do not know the value of a product or a service. Instead, people shape their preferences on the spot. For instance, when Ariely, Loewenstein and Prelec asked 146 U.C. Berkeley undergraduate students whether they wanted to attend a free poetry recitation, the percentage of respondents willing to attend the free poetry recitation was 35% when they had first been asked if they would pay to attend the recital, but only 8% when they had first been asked whether they would attend the recital in exchange for pay. As written in the Mark Twain’s novel Tom Sawyer, Tom “had discovered a great law of human action, without knowing it—namely, that in order to make a man or a boy covet a thing, it is only necessary to make the thing difficult to attain.”
This paper challenges the common assumption that economic agents know their tastes. After reviewing previous research showing that valuation of ordinary products and experiences can be manipulated by non-normative cues, we present three studies showing that in some cases people do not have a pre-existing sense of whether an experience is good or bad-even when they have experienced a sample of it.
