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More on FREE!

I wanted to clarify (make clear) my comments last week about the value of things that are FREE!  I think some people interpreted my post as saying that we should not buy a product because there is something free that comes with it, or that things that are free are not worth very much.  I am not saying either of those things.

As many of you pointed out in your comments, some of the best things in life are free – even the audio files for ESL Podcast are free!  I am not suggesting that there is a relationship between price and value (how much something is really worth to us).  What I am saying is that when we see something that is FREE!, it has a different effect on us than something with a price on it.  We react differently, and sometimes we react in a way that isn’t rational or  does not make good economic sense.

Sometimes getting something for FREE! is a good idea, a good deal.   But we have to be careful not to get something or buy something just because it is free.  You have to compare the options and decide which is really best.  That’s why I gave the example of the candy, where FREE! wasn’t actually the best deal.

~Jeff

13 Responses to “More on FREE!”

  1. Gulls Says:

    Cathy : I’ve bought a box of cat food because I got one for free.

    Bill : How many cats have you?

    Cathy : I have no cats, but I’ve still done a good bargain.

  2. julián martin Says:

    I need to improve my english

  3. Akiuki Says:

    In a efficient market, price is always related with value, so if there is no more piece of information than price for taking a decision, we could assume goods with higher price should have higher utility (worth). I am meaning than on that kind of decision is important at least two parameters: 1.- price and 2.- utility, and the utility could be different for different people and in different moments.

    What is for sure is that free goods has no opportunity costs (i.e. risks in terms of lost alternatives ), that way it is not so important if the utility (worth) of that free good is low or null, you are not taking any risk, and the ratio utility/price (this is the parameter to be used for taking an economic decision) could be higher (in fact if price is 0 the ratio is infinite) for that good than for a good with higher price.

    I apologize for the long reply (and for my poor english) but I also like a lot microeconomic.

  4. Alec Says:

    I visited USA last year, and found out that in America you have to pay for absolutely everything (and not only if you’re a stranger). So it’s no surprise that you’re so happy when you see something’s free. In American Internet 75% of advertisments contain the word ‘FREE”, because it really attracts people who are in the habit of paying for every little thing. Most of those ads are traps, though.

  5. Gulls Says:

    In a real life market.

    Nowadays the children determine, quite often, the irrational purchase behaviour of their parents.

    Troublemaker : Mother!! I want this t-shirt, then we get a box of color pencils for free.

    The mother do not need a t-shirt nor a box of pencils, but she buys the t-shirt (you can guess the quality).

    Troublemaker is quiet for a while.

  6. Linus Says:

    I don’t think that people in America pay for more things than we do, at least, in Europe, here we also have to pay for everything, and usually at a higher price; and I have to tell you than once I ran out of gas while driving in a freeway in Florida, and I was nicely surprised when an state employee gave me an small amount, enough to get to the nearest filling station, for FREE, yes no charge, the governor provides you, he said, no way that such a thing could happen in Europe, believe me. By the way, Lucy, Jeff and everybody there, thanks a lot for your help, your podcasts may be free but they are really priceless.

  7. emiliano Says:

    May be we have the feeling that it is necessary money to be happy, or we need to buy several things by the same reason. But I think that is very untrue, in fact to enjoy a beach, or to be near the sea listening the wind or the waves it is not necessary to pay anything, same that to have a good time walking with a friend just talking.
    Some years ago when I lived near Mediterraneo in a little village, I used to go out without money at all, and there I did not need to buy anything to feel happy. Now that again I am living in Madrid, it is impossible to go out without money. Even grandfathers do not need so many money to live neither to buy so many unusefull things as we do now.

    So all is relative, and what is worth or not?. It depends of people, where do you live, or what are you listening every day about being happy if you buy this or that product.
    Of course, first feeling is to get free or cheaper goods instead of expensive one, and if we really need them it should be good to stop and think if this free or cheaper one are best value than the dear, that’s the matter we are talking about. Free or cheaper one may be not a good option and we need to think about the matter more carefully.
    Years ago I used to buy everyday the newspaper, but now I do not buy any as I have all in the web. I can read N.York Times, Whasington Post, etc., and all newspapers of my country by free.
    But if I have to read a paper one I do not take a free (there are four or five in Madrid) as they are useless to me, I prefer to spend 1 euro and buy other which is most value in my opinion.
    Thank you Jeff, I think your first writting was very clear at least to me, but sometimes we talk about different matters.

  8. Jose Antonio Says:

    Returning to your comment about ESL Podcast, which really is FREE!, I absolutely agree with you in the fact than people, more often than not, pay to much attention on price, rather than the benefit they get. For instance, I find the price to being an ESL member is not a great bargain but, in my opinion, a gift for students, most of which really don’t appreciate the work you make.
    Lucy, Jeff; Thanks again.

  9. emiliano Says:

    Sorry Jeff, I take the liberty of congratulate all spanish people who are listeners of ESL like me, who yesterday saw the football play in Wiena against Rusia, and
    we WON 3 – 0 ….at least we are in the final play.
    Spanish people are happy today, it so funny, for two or three days we do not care about crissis or other problems, we have broken a curse that has been too long.
    I do not like football but I’am happy too.
    Spaniards who are listeners of ESL, please write here and tell us your feelings seing the football play yesterday, It was FREE also to watch the play on the screen, and I think
    it shoulb be amusing to write about our sensations. In my case that I do not like football I was really emotionated to see the happines of all our people.

    Thank you Jeff, I know this is not an accurate place to write this, but I know you like also baseball and talk several times about it in Eng.Caf., so forgive me …but I have to say somethin about it, and this my favorite place to express myself.

    The final, against Germany …..next sunday……we need to win.

  10. elcomandant Says:

    Hi Jeff,
    One of the few things that are free and really it’s worth is your ESLPod. Yes, it’s true. You can download an episode without conditions. The most things that you get free, you need to buy another thing before. Thanks for this Jeff. I’m improving my English language with Lucy and you. I’m enjoying each episode.

    Now I Take the comment of Emiliano. I’m spaniard and I’m glad of the victory Spanish selection . This victory is very good for Z.P. (President Socialist of Spain) because the most of the Spaniards talk about the next match against Germany instead the big crisis that is crossing Spain. But the problem is that the Spanish selection finaly won’t win the cup because Z.P. have said that he will be in Wiena, and all the world know that Z.P. is a big jinx. I’m so sorry. “Z.P. DON’T MOVE, PLEASE”.

    Excuse my bad English. I’m sure I’ll improve soon.

  11. emiliano Says:

    Yes, I think the same as “elcomandant” say, Please…..Z.P. don’t go to Wiena if you don’t we have a chance to win, and it should be nice to win because along some days the big crissis will be forgotten by Spanieards, may be till next september.
    In all my life never I have seen such a fuss about a match play like this we are playing now in Austria, all people are in the streets with the spanish flag singing aloud our himn without letters, it is funny.
    Everybody may sing it as it is…..chunda, chunda ta chunda chunda chunda ta ta chun da la la la la la la la la chunda ta chunda la la la ta chun ta chun ta chun taaaa chun ………and son on all the time.

  12. emiliano Says:

    Despite Z.P., despite German team, despite the curse of 44 years without good luck, Spain won at least.
    They deserve to win as they have been the best team of all.
    All spanish people feel close tonight and it is a miracle, so despite I do not like football I have ejoyed it
    very very much.
    I am happy of seing my “gente” so close and feeling as spaniards.

  13. Sean Says:

    Congratulations spaniard~~~You win the final finally after 44 years when you first won it.

    I’m a Chinese lived in China, because of the Time Zone, it’s hard for me to watch the game held in Europe. Everyday I don’t go to sleep before 4 am(Beijing Time) to wait for watching the game. However, all the teams played excellent, especially Spain. Villa, without doubt, is one of the best players in this competition. I like him very much!!!