Priceless : the myth of fair value (and how to take advantage of it)

Prada stores carry a few obscenely expensive items in order to boost sales for everything else (which look like bargains in comparison). People used to download music for free, then Steve Jobs convinced them to pay. How? By charging 99 cents. That price has a hypnotic effect: the profit margin of the 99 Cents Only store is twice that of Wal-Mart. Why do text messages cost money, while e-mails 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 , the 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, irrational, and 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, cell phone plans, supermarket aisles, real estate offers, wage packages, tort demands, and corporate buyouts. Prices are the most pervasive hidden persuaders of all. Rooted in the emerging field of behavioral decision theory, Priceless should prove indispensable to anyone who negotiates. The Washington Post - Steven Pearlstein Much of behavioral economics…has focused on the seemingly crazy ways in which people and prices interact. In his new book, Priceless, William Poundstone offers a thoroughly accessible and enjoyable tour of this research. Although not an economist, Poundstone is an engaging intellectual historian…It was more than a century ago that Oscar Wilde famously observed that people know the price of everything and the value of nothing. In Priceless, we now have the proof. Prada stores carry a few obscenely expensive items in order to boost sales for everything else (which look like bargains in comparison). People used to download music for free, then Steve Jobs convinced them to pay. How? By charging 99 cents. That price has a hypnotic effect: the profit margin of the 99 Cents Only store is twice that of Wal-Mart. Why do text messages cost money, while e-mails 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 , the 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, irrational, and politically incorrect. It hasnt 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, cell phone plans, supermarket aisles, real estate offers, wage packages, tort demands, and corporate buyouts. Prices are the most pervasive hidden persuaders of all. Rooted in the emerging field of behavioral decision theory, Priceless should prove indispensable to anyone who negotiates. The $2.9 million cup of coffee Price cluelessness The myth of the boomerang Body and soul Black is white Helson's cigarette The price scale Input to output Lunch with maurice Money pump The best odds in Vegas Cult of rationality Kahneman and Tversky Heuristics and biases The Devil's greatest trick Prospect theory Rules of fairness Ultimatum game The vanishing altruist Pittsburgh is not a culture Attacking heuristics Deal or no deal Prices on the planet Algon The free 72-ounce steak Price check Shilling for Prada Menu psych The price of a super bowl ticket Don't wrap all the Christmas presents in one box Who's afraid of the phone bill? Breakage and slippage Paying for air Cheap and cheaper Mysteries of the 99 cent store Meaningless zeros Reality constraint Selling Warhol's beach house Groundhog day Anchoring for dummies Attention deficit Drinking and deal making An octillion doesn't buy what it used to Selling the money illusion Neutron Jane Beauty premium Pricing gender Search for suckers It's all about testosterone Liquid trust The million dollar club The mischievous Mr. Market For the love of god Antidote for anchoring Buddy system The outrage theory Honesty box Money, chocolate, happiness. Prices are a collective hallucination. Here, 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, irrational, and 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, cell phone plans, supermarket aisles, real estate offers, wage packages, tort demands, and corporate buyouts. Prices are the most pervasive hidden persuaders of all. --From publisher description Explores the psychology of price, exposing how retailers try to get consumers to pay more for less and how this new mindset dictates the design of price tags, menus, rebates, cell phone plans, supermarket aisles, real estate offers, and wage packages.