Friday, January 18, 2013

Efficiency and Bad Mental Models

Back when I was growing up we kept the boxes on all electronics. Up in our attic there was a box for each PC, each TV, our stereo, and anything else of similar worth. You kept the box because these items were valuable and you might want to return them, and if you moved (in and out of college, or between apartments), the boxes might minimize damage to these important goods in transit.

Recently I bought a new printer, an Epson all-in-one Workforce 545. I bought this printer specifically because it had "iPrint" which allows for immediate printing with no drivers or other installation on all Apple devices, including iPads, iPhones, and my Mac. For your iPad or iPhone if you upgraded to IOS 6 you can see it immediately when you click on the icon. It works great. I have it directly connected to one of our Windows PC's and it works great as a traditional printer, as well.

But what do we do with the box nowadays? I keep it around for a couple of days to make sure everything runs reasonably well, and then I throw it out. Why? Because that printer, which has capabilities that would have seemed like science fiction a few years ago in a home device (remotely print across all devices without drivers) cost me about $130. That printer is essentially disposable. This printer, which includes a scanner and actually relatively advanced networking functions, has plummeted in price from what it WOULD have cost to do the same functions (if it were even possible) a decade ago.

To see the opposite of efficiency, go out for dinner and drinks on a Friday or Saturday night in River North. Entrees, an appetizer salad, a couple of drinks each, and a dessert will definitely cost you north of $100 and likely closer to $200. Every time I go out on the weekend I essentially purchase one of those printers and throw it away anyways.

This difference between manufactured goods and services (or "crafty" items, like designer lighting or tile) has grown immense. I understand why it is expensive to buy a meal in River North - real estate is punishingly expensive, food is expensive, labor is expensive, you have to pay a raft of fees and taxes of all sorts (likely under and over the table) to run your business, union labor has to be used to build everything (unless you want a giant rat installed in front of your business, which I see a lot in River North). There is little or no efficiency inherent in any of the above items (except for food production), and few incentives to change the business model when you can just pass on these rising costs to people like me who go out on the weekend as long as they are willing to pay for it.

I still fall for the "mental trap" and sweat over paying a few dollars more for an electronic device buying from one location or another and whether or not to pay more for an upgrade or advanced features. Meanwhile I go out on the weekend and end up paying $200 for a meal for two and that is business as usual (in River North, at least). This is because I haven't yet shed my upbringing to "keep the box".

Cross posted at Chicago Boyz


Dan from Madison said...

One nit with this - food in general isn't really expensive - restaurants are expensive. You are paying for an experience. 99 times out of 100 you can buy and prepare the same exact food, usually better tasting and more healthy than most restaurants. Of course, you can buy beer and wine and/or cocktails WAY cheaper than buying them in a bar, but again, it is an experience.

I can think of a few exceptions like sushi (can't imagine how much it would be to procure your own tuna loin or sea urchin roe and to cut and prepare them correctly) and perhaps a dry aged steak (you can also do this yourself but it is a scary proposal to me when you are talking bacteria) but in general most things you can get at a store WAY cheaper. Then again, this is also an opportunity cost. What is your time worth? If you take an hour or two to prepare a meal at home, it that experience worth the time and energy, or do you just want to order off the menu, relax and have a conversation?

Probably getting a bit too on the fringe here, but there it is.

Carl from Chicago said...

Agreed that you are paying for the experience, especially in River North. The restaurants are packed with people and generally very lavishly appointed. Some of the restaurants I go to do have cuisine that would be hard to replicate or very time consuming, but what do I know because I can't cook :)

Dan from Madison said...

You would be surprised if you spent some time in a kitchen how quickly you would be able to master a lot of the techniques. There is some trial and error of course, but again, where do you want to spend you time.

Gerry from Valpo said...

You are not alone. I do the same with old computer boxes for the same reasons.

Noting at all wrong with going out on the town for special occasions. But our weekend dinners at home cost a fraction of that $200 tab and most taste as good or better since I take the time, use fresh quality ingredients and love to cook.

It's been a challenge for me to beat the restaurant quality and proud to say at least 80% of the time I have : )