You’re not stupid, but you can be fooled. For millennia, the best salespeople have known how to exploit the vulnerabilities of the human mind. In the burgeoning field of behavioral economics, we’ve begun to give precise names to the mental weaknesses that make us all susceptible to a well-crafted pitch. Drawing on the insights of psychology, behavioral economists have explained why we buy more stuff at $0.99 than at $1.00 (the “left-digit effect”), why we commit to gym memberships we’ll never use (“optimism bias”), and why we don’t return things we buy as often as we should (“post-purchase rationalization”). The giants of the web, from Amazon to Zynga, use similar tricks to keep us coming to their sites, playing their games, and buying their goods. In fact, that’s how they became giants in the first place. Here’s how they game us—and how, in some cases, we wind up gaming ourselves.

Eliminating small frictions can radically alter one’s decisions. An elegant demonstration of this comes from research by Eric Johnson and Dan Goldstein, who asked people whether they wanted to opt out of organ donation (i.e., starting with the choice preset at “donate”) instead of asking whether they wanted to donate (presetting at “don’t donate”). That switch caused the pro-donation response to rise from around 40 percent to more than 80 percent. This is the power of defaults: We have a marked tendency to take the path of least resistance.

For many of us, Amazon.com functions as a default because it has all our credit cards and addresses on file. If we asked people how much they would pay to save the time needed to retype that information on another site, they’d most likely say, “Not much.” Most of us don’t value our time so highly. But during the few seconds in which we make our buying decisions, when we are not thinking very deeply, the barrier to entering that data seems too forbidding and we default to Amazon.

• 1. To get this free shipping option, we need to spend at least $25—which means we’ll often add an item.
• 2. If we pay $79 a year, we get free two-day shipping on most items—which makes us buy more, too.

Amazon also created two smart solutions to the problem of shipping cost, which has always been one of the biggest psychological hurdles to buying online. The first is Super Saver Shipping, which sets a $25 threshold to qualify for free shipping. This turns a lot of one-item purchases into two-item sprees, as people add an extra book or CD just to avoid shipping costs.

The more interesting mechanism is Amazon Prime, the option I have been using for years. For an up-front fee of $79 a year, I get free two-day shipping on almost everything I order. I suspect that Amazon Prime causes shoppers to buy considerably more, and for three reasons. First, knowing that one store has free shipping makes us less likely to search for another place to buy. Second, once on Amazon, the cost of shipping is no longer a psychological barrier, so impulse shopping is less inhibited. Third, because we’ve essentially paid shipping in advance, it becomes a sunk cost—so to make it a good deal, we try to amortize our investment by making more purchases on the site.

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