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Weddings: A behavioral economics playground

I got married last weekend (woohoo!) I am so happy to be married, and like so many before me, (perhaps) even happier to be done with planning the wedding. Unlike most though, I have had the joy of working on my masters in behavioral economics during the bulk of my wedding planning, which has given me a unique perspective on the experience. As you might expect, weddings contain a plethora of BE examples, here are my top ten:

Endowment Effect:

Many brides have been dreaming of their big day since childhood. And in the world of Pinterest, we have all been able to visually build a picture of what that day could/should look like. Once you visualize yourself in a jaw-dropping dress, surrounded by an Eden-like oasis of flowers, with an amazing, gravity-defying cake and captured in photographs that defy the laws of physics…it is hard to let go of those dreams and step into reality. The endowment effect says once you own something it has greater value. In the case of weddings, visualization becomes ownership – and brides are willing to pay a lot of money to recreate those dreams. Fortunately (unfortunately?) for them, there are an unlimited amount of vendors more than willing to fill that void…for a price.

Anchoring and Adjustment:

There are so many things to buy when it comes to a wedding. Very soon after the engagement (and sometimes before) brides stock up on magazines and online articles, and begin binge-watching episodes of Say Yes To The Dress or My Fair Wedding. The problem with these experiences is they showcase high priced items ($25,000 dresses for example) as if they are the norm. This sets a price anchor in the mind of the bride, whether she wants it or not. When $25,000 is the starting point and you adjust down to an amount that is more in your own budget, the point you settle at will be higher than if the cost of the dress was $2,500 or $250. The first exposure you get to any item sets the anchor, and you can only adjust from there. Getting that anchor from a source that is dedicated to selling dreams may set it higher than your budget would like.

Hyperbolic Time Discounting:

I love this one! It may just be because of the name, but essentially people are good at saying one thing and doing another. It is easy to say, “I have $2,500 for my dress including alterations” and then try on/fall in love with a $4,000 dress if you allow yourself to try it on. The problem becomes the process of justifying spending that money now even though it creates a problem for your future self. You may rationalize and say you will take that money from the flowers or the linens, but too many people display this behavior in multiple categories, blowing their budget out of the water. The best advice? You set a budget for a reason, don’t let yourself get sucked into the situation where you need to make the tough decision. Do not try on dresses that are above your budget. You will inevitably fall in love with one (see endowment effect).

Tunneling:

So…many…details…must plan! I have had the benefit of building my consulting business while going to school and planning this wedding. I had the luxury of putting aside work tasks when I needed to get things done for the wedding, and having the benefit of a flexible schedule so I could have appointments on weekdays when needed. Unfortunately, many brides don’t have this luxury. With so many decisions to make, appointments to keep, and follow ups to complete…it is easy to lose sense of other priorities. Wedding planning can creep into other areas of life – work, personal, etc. My advice? Put that tunneling to good use and focus on one detail at a time – only allow yourself to work on one item each week and then move on to the next. This leads to the next issue…

Decision Paralysis:

When there are too many decisions to be made (and lots of pressure on the outcome of those decisions) many people do their best ostrich impression. I can’t tell you how many times my (incredibly patient and wonderful) fiancee would ask me what I wanted for dinner and I responded with something like, “I can’t think about that right now…it is too much stress!” Bless him. Brides can feel overwhelmed by all the decisions (especially those without a background in project management). Fortunately, many vendors have learned this and set up a few tricks. For example, the location where I bought my wedding gown from had a policy that I could get a large discount or an accessory credit to spend on anything in the store if I bought my dress on the first visit. Lucky for them, I was a little late to the dress shopping party and found the perfect (in budget!) dress on my first visit, so I bought it that day. Was I encouraged by their enticing tactic as well? I’m sure of it. But, I got a lovely pair of earrings to go with my dress, and could remove the stress of that decision immediately. Win-win!

Procrastination:

Remember that ostrich comment? Planning a wedding is ripe with excuses to put off the things you should do by adding things you may not need to do. For example, I was feeling overwhelmed with the tasks ahead of me, so I started browsing Pinterest for a task I didn’t need to start for a few more weeks (but was more fun than the task at hand). I found some projects I hadn’t even considered – custom cocktail napkins?!!? And went to the store to buy some stamps, ink pads and paper napkins because I could absolutely do those myself for cheaper than buying them. 240 napkins later…I achieved a sense of accomplishment even though I didn’t complete the tasks on my to do list. However, I did manage to buy a few more things in the process (which I convinced myself were necessary).

Planning Fallacy:

This is a fancy way of saying “setting unrealistic goals.” Many brides find themselves saying, “I know I have been putting this off, so this week I am going to do these 157 things to get back on track! I may even be ahead!” Then, you end up stuck, depressed, and even more stressed (see decision paralysis, tunneling, procrastination). Another way this shows itself in wedding planning in the internet age is with tools like Pinterest. Yes, I love (LOVE!) Pinterest. It is glorious. But, it gives a false sense of accomplishment. Pinning a cake (or dress or flower arrangement or tablescape) to your Wedding board doesn’t actually do anything. Pinning a great article to read later doesn’t alleviate stress. In many cases, it adds more to the to do list (see procrastination) and a lot of unnecessary projects.

Lack of Self Control:

I don’t know that I even need to elaborate on this…but why not. Weddings are a time when brides are reminded often about how this is the biggest and most important day of their life. That every detail matters, and people will ridicule them if the favors don’t require a loan to provide or the dress isn’t hand-stitched with crystal beads. Many brides feel the need to get everything and make it perfect, and they pay for upgrades and packages they potentially don’t need or that will not be all that noticeable on the day of. If you feel yourself losing control of the day and details, step back, take a breath, think of the weddings you have been to. Do you remember whether the invitation was foil or real gold leaf? Did you actually keep the favor you were provided? What do people say about it today, if anything? What do the guests remember?

Herding:

It is easy to become a sheep and follow the crowd even if it isn’t in our best interest – especially when wedding planning. If you see everyone else doing something, you start to wonder if you should do that too. Did you forget something? Is that tradition really important? You will also be pulled in many different directions by well-intentioned people (family, friends, salespeople) trying to influence the way the day is set up. Try and focus on what is important to you and your fiancee, and know that you don’t need to do anything you don’t want to do. We didn’t love the idea of the garter toss, so we didn’t do it. If it isn’t going to add to your happiness on the day (and especially if it is going to detract from it) cut it out.

Ego Depletion:

When people get stressed, tired, or hungry, they feel depleted and rely more on default options or the path of least resistance. This state can lead to ordering items for the wedding and trusting the default is the right one without much research. If you are ordering your invitations online and it is defaulting to add return envelopes with expensive liners and a higher quality paper stock that feels exactly like the stock that is half the price…sticking with the default can become expensive. Read the options, understand them and don’t simply settle for the default without knowing what you are agreeing to. As I said, there were many lessons from this experience that relate to behavioral economics, even more than the ten listed here. Hopefully, you can learn from these and see the tie-ins to more than just wedding planning. These concepts apply to everyone and all sorts of situations. How would these come to play for a busy entrepreneur, parent or executive?

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