Market Norms vs. Social Norms

by Ben Perreira

I started reading Dan Ariely’s Predictably Irrational this week. It’s a great read for anyone interested in consumer psychology/ behavioral economics. 

He discusses the idea of the market and social values of goods. He has found that people act in markedly different ways when they accept payment for things than they would if they were doing something strictly to remain in line with social normality. It may sound abstract, but it’s pretty simple.

Here’s an example:

I have been surfing since 1997 and began giving surf lessons around 2002. At first I would take out friends and family members. After a while, I honed my craft and people started asking me if they could pay me for lessons. I accepted their money as any enterprising capitalist would. I loved surfing, enjoyed teaching and was not opposed to making money. It was a win-win situation, I thought.

As I began to make $50/hour teaching surf lessons (vs. $8.50/hour that I was making at a surf shop), I began to detest giving surf lessons for money. When I was doing it for free I was forced to view all gains as social, and it made me satisfied with the transaction. Once I started charging it became something I was forced to do in order to make hard currency to purchase other goods. I became another service-provider; a professional giver of surf knowledge. It even made it harder for me to enjoy going surfing outside of “work.”

I still teach friends how to surf on occasion because I still enjoy it. We all have things to learn from each other, so why not share what we know with those we admire?

But I never accept money for surf lessons. 

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