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A12 BUSINESS
Friday 14 July 2023
How behavioral economics can help

you save on airfare

By SAM KEMMIS of Nerd-
Wallet
It’s not just you: Shopping
for airfare is harder than
ever. Choosing between
basic economy and regu-
lar economy fares and
navigating add-on fees
makes booking more com-
plicated, and that’s no
accident. Airlines are har-
nessing lessons from a still-
emerging academic field
known as behavioral eco-
nomics to nudge custom-
ers into spending more.
“Behavioral economics
was developed by incor- Travelers use the kiosk by the ticketing gate as they prepare for
porating ideas from psy- travel from Love Field airport, May 19, 2023, in Dallas.
chology into standard eco- Associated Press
nomic theories,” says Cait
Lamberton, a professor of these tendencies and how ing to buy an airline ticket:
marketing at the University they drive our decisions. So “decision fatigue.” That is,
of Pennsylvania’s Wharton to save money on flights, we tend to make worse
School. “If you see a deal customers need to under- decisions when we have to
that is available for only stand how the airfare shop- make several of them in a
a short amount of time, ping experience has been row.
and you pay more than engineered to exploit our This airline or that? Early
you usually would, stan- biases. flight or later? Pay for a
dard economics would say DON’T BUY BECAUSE EV- window seat? Pay now for
you’ve made an irrational ERYONE ELSE IS a checked bag? Upgrade
decision. Behavioral eco- Airlines will use a technique to premium economy?
nomics says that no, what called “social proof” to up- With each decision, our
your brain is doing is re- sell certain products, such ability to make ideal choic-
sponding to scarcity.” as trip protection, by sug- es diminishes.
These seemingly irrational gesting that many other “Once I’m four or five clicks
choices are called “bi- travelers are adding it to into purchasing this, the
ases,” many of which can their itineraries. Yet these price has changed com-
affect how we shop. For marketing tactics don’t of- pletely,” Lamberton says,
example, “loss aversion” fer much real-world value suggesting that airlines will
makes us hyper-sensitive for consumers, according withhold information until
to losing money and more to experts. later in the process, when
likely to buy something like Lamberton explains that consumers are less likely to
trip protection. The “decoy those messages during the start over.
effect” makes us more like- checkout process, like the Indeed, a 2020 study pub-
ly to choose between two number of people who lished in Marketing Sci-
suboptimal options when have insured their trip to- ence found that custom-
a third, even worse option day, shouldn’t sway your ers made suboptimal de-
is presented. For example, decision to purchase be- cisions when prices were
airlines may offer a decoy cause they often lack con- “dripped” throughout the
like an expensive premium text. “Is that a lot of people checkout process, largely
ticket with fewer ameni- or a few people?,” she because of their unwilling-
ties, which may make the says. ness to start over.
cheaper premium ticket BE PREPARED FOR ADD-ON Overcoming decision fa-
with more benefits look FEES tigue isn’t easy. Realizing
more appealing. Another bias that should a flight is more expensive
Airlines are well aware of ring true for anyone try- than you imagined and
then starting over takes
time and energy, so con-
sider booking flights at a
time when you’re not in a
rush and you can spend
more time doing compari-
son shopping.
“If you want to overcome
these biases, you will have
to slow down and give
yourself the space to pay
attention to these things,”
Lamberton suggests.q