What is Weber’s Law, and why should you know about it?

Ernst Heinrich Weber (1795–1878) studied human response to a physical stimulus in a quantitative fashion. In one experiment, he blindfolded a man and gradually increased the weight he was holding. The subject was told to respond as soon as he felt the increase. It was found that the smallest difference a person can perceive as a difference, is proportional to the starting value of the weight. In other words, start at an ounce and a half-ounce difference is easy to detect, but start at ten pounds and you won’t notice a difference of several ounces.

Weber actually created an exact formula describing this. A century later scientists in the field of behavioral economics applied the idea to the “money decisions” that people make. It was stated something like this: A change of stimulus is more emotional and motivational, according to the base: Subjects tested would drive across town to save $10 on a $20 item, for example, but not to save $20 on a $500 item – even though the effort was the same for double the savings. For sales people, this means you probably won’t lose a sale on a thousand-dollar couch over a $20 difference, so forget about dropping the price and sell the other benefits.

This, by the way, is why car dealers can so successfully sell options for your new vehicle. The day before you bought that car, you may not have paid $200 for a stereo, but you easily agree to pay $400 for one as part of the car purchase. The reasoning goes like this, “What’s $400 more when I am already spending $24,000?” Well, actually, it’s the same amount as yesterday, but try to explain that to your subconscious mind.

Now that you are aware of Weber’s Law, here a couple questions to ponder:

- In what other areas of life would you expect to see the effects of Weber’s Law?

- How can you avoid making less-than-rational decisions due to this effect?