Priceless (The Myth of Fair Value and How to Take Advantage of It)
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, best-selling 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.
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