Earlier quoted context omitted.
If it's free, people are suspicious and judge the cost to be something implicit, generally with a higher expected cost than $1. On the other hand if you make the cost explicit, people are more comfortable. It ties in with the story in Freakonomics about the daycare that started to charge a small "fine" to discourage parents picking up the child late, with the effect that these incidents happened more often. Because t…
I'd be careful of inferring too much from things like this, particularly given how much criticism Freakonomics has received. One example from Youtube: https://www.youtube.com/watch?v=11eTG4_iwqw&pp=ygUVZGVhdGggb... > If it's free, people are suspicious and judge the cost to be something implicit, generally with a higher expected cost than $1. On the other hand if you make the cost explicit, people are more comfortabl…
Likewise, "free car" can come from a family or friend. So I might trust it more than a $500 beater that I'd immediately take to shop.