Richard Thaler’s insight into the snuggie

If you watch much U.S. TV you’ve probably seen the infomercials for something called a Snuggie. Part blanket, part full-body fleece jacket, the Snuggie is not something you want to wear outside the confines of your house. Author William Poundstone argues that “the central principle of infomercials is what the economist Richard Thaler calls “Don’t wrap all the Christmas presents in one box.” Or, people really like the “free” stuff that comes with the actual stuff they are “paying” for.

“Thaler deduced that marketers should devote less energy to promoting how absolutely wonderful their product is, and more to breaking it down, feature by feature, or selling several products in one bundle,” Mr. Poundstone writes. “The one thing you can’t buy in an infomercial is one thing.”

The Snuggie infomercial first plugs the sleeved blanket, then throws in a free book light, announcing the price is $19.95, plus $7.95 for postage and handling, then adds that a buyer also will receive a second Snuggie and second book light for an additional $7.95 for postage and handling. It was compulsory to order two Snuggies and two book lights for a total of $35.85, plus tax, though that actual price was never mentioned.

Full story in the New York Times here.

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