A Rental Car Puzzle

Have you ever noticed that whenever you rent a car, when they give you the keys to the vehicle, there are always two sets of keys?  But the two sets of keys are attached to the same key chain, and no matter how hard I’ve tried, I have never figured out a way to detach one set of keys from the other.

What could possibly be the point of giving customers two sets of keys that can’t be separated?  The downside is that if the keys get lost, two sets of keys are gone.  Also, the keys are much bulkier in my pocket than otherwise would be the case.

The only possible explanation I can see is that since no one carries around two attached sets of keys to the vehicle they own, people are less likely to confuse their own car keys with those of the rental vehicle.  It just doesn’t seem like that could be the logic, however.

So can anyone explain to me the real reason rental car companies do this?

Should You Ignore the Weather When Buying a New House or Car?

An NBER working paper (full PDF here) by Meghan R. Busse, Devin G. Pope, Jaren C. Pope, and Jorge Silva-Risso explores the role of projection bias when choosing a new car or house. It turns out that weather conditions are a huge factor when consumers are debating big purchases like houses or cars. The abstract:

Projection bias is the tendency to overpredict the degree to which one’s future tastes will resemble one’s current tastes. We test for evidence of projection bias in two of the largest and most important consumer markets – the car and housing markets. Using data for more than forty million vehicle transactions and four million housing purchases, we explore the impact of the weather on purchasing decisions. We find that the choice to purchase a convertible, a 4-wheel drive, or a vehicle that is black in color is highly dependent on the weather at the time of purchase in a way that is inconsistent with classical utility theory. Similarly, we find that the hedonic value that a swimming pool and that central air add to a house is higher when the house goes under contract in the summertime compared to the wintertime.