Who is paying?

Have you ever decided you would have the Roast Chicken on the menu but then changed your mind and chose the Rump steak plus an extra side when you realised that someone else is picking the tab on your meal? Or chose a larger capacity iPhone than the one you had originally picked after discovering your company has this $200 subsidy on mobile phones that you could tap into? Wait, what if it was your Mum who offered to buy you the phone?

So we do realise that our choices are affected by who is paying. Naturally, because we try to balance our own cost and benefits. So to a large extent, the economists are right about utility, and thereby trying to derive demand from there. But it also means that all the purchases around gift-giving actually is not allocative efficient. At the same time, it is often also not efficient for companies to spend on behalf of employees for certain benefits (though it is for other benefits such as insurance).

Beyond the thought about efficiency, is the point about what you’re actually consuming and whether it is good for you. If Amazon pays Google for the search you are performing, should you be concerned about your consumption behaviours being influenced? Are you not the one paying for the search somehow in other ways? Are they intentional? Are they efficient or beneficial to you as an individual?