by Matthew Leitch, 25 October 2001
This may seem a strange topic as I have been claiming that we memorise things by thinking. Surely that means we automatically learn our own thoughts? Sadly no.
If you sit down and think deeply about something the following weaknesses in your memories of that thinking are likely:
Example: Sustainability. Creating a sustainable economy, i.e. a truly environmentally friendly one, is one of the big problems facing our society. One tool for businesses that want to operate in a less unsustainable way is to lease their products to customers rather than selling them outright. Strictly speaking the idea is to provide customers with a service for which they pay, rather than paying for the asset that provides the service. This means you have an incentive to optimise the whole-life efficiency of things you make instead of just their initial selling price. However, it has been suggested that some consumers are reluctant to go along with this because they prefer the security of owning the asset and the feeling that they would still have it if their money ran low because of redundancy or retirement. Does this argument have merit? Is insuring against this a hidden cost of leasing?
All this I have already learned and is the starting point. However, thinking through this problem is going to take some patient analysis. Here are the thoughts, showing how memory building is vital:
At this point some cash flow modelling is done and this would be a long list of observations. At the end of it, the result will be obtained and I need to notice the actions that flow from it, such as remembering to post a reply on a discussion database where this problem was raised, remembering to raise it in a forthcoming seminar, and perhaps deciding to review the goods I purchase to see if they could be leased more economically as well as giving environmental benefits.
The result of all this thinking is a rather complex conclusion and more questions raised. However, in case you're wondering, the answer to the original question is that the sense of security is not a good reason and insurance should not be needed if the user was in a position to buy the asset but chose to lease instead.© 2001 Matthew Leitch