Priceless
the myth of fair value (and how to take advantage of it)
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- $20.99
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- $20.99
Publisher Description
People used to download music for free; then Steve Jobs convinced them to pay for it. How? By charging 99 cents. Prada and other luxury stores stock a few obscenely expensive items — just to make the rest of their inventory seem like a bargain. Why do text messages cost money, while emails are free? Why do jars of peanut butter keep getting smaller in order to keep the price the ‘same’? The answer is simple: prices are a collective hallucination.
In Priceless, bestselling author William Poundstone reveals the hidden psychology of value. In psychological experiments, people are unable to estimate ‘fair’ prices accurately and are strongly influenced by the unconscious, the irrational, and the politically incorrect. It hasn’t taken long for marketers to apply these findings. ‘Price consultants’ advise retailers on how to convince consumers to pay more for less, and negotiation coaches offer similar advice for businesspeople cutting deals. The new psychology of price dictates the design of price tags, menus, rebates, ‘sale’ ads, mobile-phone plans, supermarket aisles, real-estate offers, wage packages, tort demands, and corporate buyouts. Prices are the most pervasive hidden persuaders of all.
PUBLISHERS WEEKLY
Poundstone (Gaming the Vote) dives into the latest psychological findings to investigate how and why prices are allocated. Beginning with the controversial lawsuit in which a jury awarded $2.9 million in damages to a woman who had spilled a scalding cup of McDonald's coffee on herself, the author presents a readable history of how we are subtly manipulated into paying more (or less) for goods and services and the research that attempts to explain our baffling and irrational susceptibility to pricing. The idea of "anchoring and adjustment" setting an arbitrary number to subconsciously drive higher or lower estimates is just one of many research areas explained at length. While Poundstone's case studies are vivid, the abundance of theories and experiments might prove overwhelming for the casual reader. Nevertheless, the scope of the analysis its attention to economic abstractions as well as real-world consequences braids together theory and practice to leave an indelible impression on the reader. Grocery shopping will never seem so simple again when one realizes how much work goes into assigning a price to a box of cereal.
