Imagine you are looking to buy a new clock radio. At the store where you expect to buy it, you find that the price is $35. A clerk informs you that the same item is available at another branch of the same store for only $25. The store is a twenty-minute drive away and the clerk assures you that they have what you want there.

What would you do? Would you buy the clock radio at the first store or drive to the second store?

If you’re like most people, you’re probably willing to go to the other store. After all, it’s only a short drive away and you save almost 30 percent on the radio. It seems like a no-brainer.

But consider a similar example. Imagine you are buying a new television. At the store where you expect to buy it, you find that the price is $650. A clerk informs you that the same item is available at another branch of the same store for only 640$. The store is a twenty-minute drive away and the clerk assures you that they have what you want there.

What would yo do in this situation? Would you be willing to drive twenty minutes to save $10 on the television?

If you’re like most people, this time around you probably said no. Why drive twenty minutes to save a few bucks on a TV? You’d probably spend more on gas than what you’d save on the product. In fact, when I gave each scenario to one hundred different people, 87 percent said they’d buy the television at the first store while only 17 percent said the same for the clock radio.

But if you think about it, these two scenarios are essentially the same. They’re both about driving twenty minutes to save $10. […]

Diminishing sensitivity reflects the idea that the same change has a smaller impact the farther it is from the reference point.

-Contagious, p.166