Priceless: The Myth of Fair Value
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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.
1 The $2.9 Million Cup of Coffee 32 Price Cluelessness 83 The Myth of the Boomerang 174 Body and Soul 255 Black Is White 346 Helson's Cigarette 387 The Price Scale 428 Input to Output 499 Lunch with Maurice 5610 Money Pump 6211 The Best Odds in Vegas 7112 Cult of Rationality 7713 Kahneman and Tversky 8114 Heuristics and Biases 8615 The Devil's Greatest Trick 9316 Prospect Theory 9717 Rules of Fairness 10418 Ultimatum Game 10919 The Vanishing Altruist 11620 Pittsburgh Is Not a Culture 12021 Attacking Heuristics 12522 Deal or No Deal 12923 Prices on the Planet Algon 13424 The Free 72-Ounce Steak 14325 Price Check 14926 Shilling for Prada 15527 Menu Psych 15928 The Price of a Super Bowl Ticket 16529 Don't Wrap All the Christmas Presents in One Box 16930 Who's Afraid of the Phone Bill? 17231 Breakage and Slippage 17632 Paying for Air 17933 Cheap and Cheaper 18234 Mysteries of the 99-Cent Store 18435 Meaningless Zeros 19336 Reality Constraint 19637 Selling Warhol's Beach House 20238 Groundhog Day 20739 Anchoring for Dummies 21340 Attention Deficit 21541 Drinking and Deal Making 21942 An Octillion Doesn't Buy What It Used To 22343 Selling the Money Illusion 23044 Neutron Jane 23445 The Beauty Premium 23946 Search for Suckers 24147 Pricing Gender 24548 It's All About Testosterone 24849 Liquid Trust 25250 The Million-Dollar Club 25551 The Mischievous Mr. Market 26052 For the Love of God 26653 Antidote for Anchoring 26954 Buddy System 27255 The Outrage Theory 27656 Honesty Box 28057 Money, Chocolate, Happiness 284Notes291Sources 311Index 325
