Question

(Related to the Apply the Concept on page 346) Baseball writer Rob Neyer described attending a Red Sox game at Fenway Park in Boston and having a seat in the sun on a hot, humid day: "Granted, I could have moved under the overhang and enjoyed today's contest from a nice, cool, shady seat. But when you paid forty-five dollars for a ticket in the fourth row, it's tough to move back to the twenty-fourth [row]." Briefly evaluate Neyer's reasoning.

Short answer

Neyer's reasoning appears rational given his likely interest in the game and his professional role as a baseball writer. His willingness to endure the heat for a better view shows a subjective valuation of his fourth-row ticket over the comfort of a twenty-fourth-row seat. While others might prioritize comfort, Neyer has determined his seat's proximity to the game to have a higher relative value.

Step-by-step solution

Understand the Writer's Situation

First, it's necessary to understand the situation. Rob Neyer is facing a dilemma at a Red Sox game at Fenway Park. He paid forty-five dollars for a ticket in the fourth row but the seat is in the sun on a hot, humid day. He has the option to move to a cool, shady seat under an overhang, but it's on the twenty-fourth row.

Analyse Neyer's Decision

Next, let's analyze Neyer's decision not to move. He values the proximity to the game provided by his current location. Despite the uncomfortable heat, he has not moved because he values this fourth-row seat more than the more distant and a less expensive twenty-fourth row seat.

Evaluate the Rationality of the Decision

The rationality of a decision is subjective and depends on individual priorities. Considering Neyer's profession and likely interest in the game, it can be seen as rational for him to value seat proximity over comfort.

Key concepts

Decision Making

Decision making involves evaluating available options and selecting the one that best aligns with personal preferences and goals. In Rob Neyer's case, he had to make a choice between comfort and proximity to the action at the baseball game.
Neyer paid $45 for a fourth-row seat, which is closer to the field but comes with the discomfort of being in direct sunlight on a hot, humid day. Alternatively, he had the option to move to a cooler, shady seat higher up in the twenty-fourth row.
Key points to consider in decision making include:

• Identifying and assessing the importance of different factors (proximity vs. comfort).
• Weighing the benefits and trade-offs of each option.
• Recognizing that individual preferences heavily influence choices made.

In this context, Neyer's decision was informed by his personal value of enjoying a closer view of the game despite the heat. Each person's decision matrix will vary, leading to different, yet equally valid outcomes.

Consumer Choice

Consumer choice examines how individuals decide to spend their money based on their preferences, budget constraints, and options available. Rob Neyer exemplifies a consumer faced with such a decision-making scenario.
Having already spent $45 on a premium seat, Neyer was reluctant to change seats even when it was uncomfortable. This reluctance stems from how much he values the closeness to the field, a benefit linked to his initial payment.
Factors impacting consumer choice include:

• Price tags for each option available (already incurred for the fourth-row seat).
• Perceived satisfaction or utility derived from each consumption option (better view and closeness to the game vs. cooler air).
• The availability of alternatives and their associated benefits and trade-offs.

Neyer's choices underline how consumers weigh additional satisfaction against money spent, ultimately underpinning personal utility derived from the seemingly non-monetary aspects of a purchase.

Sunk Cost

Sunk cost refers to resources that have already been spent and cannot be recovered. In decision making, it is crucial to ignore these costs as they should not impact future decisions.
Rob Neyer's hesitation to move seats due to the original cost of $45 for the fourth-row ticket exemplifies the sunk-cost fallacy. He factors in a past financial commitment, which should not influence his current decision of pursuing comfort.
Elements of sunk cost include:

• Irrecoverable expenses (money spent on the ticket).
• The psychological impact of past investments on new decisions.
• The potential for biased decision-making when recent costs unduly influence current choices.

Sunk costs challenge rational decision-making by tempting individuals to consider prior investments over present and future benefits. Ideally, Neyer's decision should focus on current conditions and desired outcome rather than a previous financial outlay.