If you're offered a free cookie, you might say yes. But if you're paid to eat a free cookie, would your response be the same?
In our new research, twice as many people were willing to eat a cookie when they weren't offered payment compared with when they were.
From a purely economic perspective, our findings reflect irrational decision making. Objectively, a cookie plus money is better than just a cookie.
But people aren't purely economic. They're social animals with a tendency to look for hidden reasons behind other people's behaviors.
In the case of overly generous deals, people are expecting a "phantom cost"—one hidden in the initial offer. And this expectation influences their decision to accept something or not.
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