By William Poundstone
Poundstone discuss the many psychological features that impact how we decide a price. The writing is good, he covers many topics, who made the discovery, and the experiments made to test them. Overall, the book is a little disconnected though as there are many short chapters on related themes, as opposed to a few larger chapters that dig deep into a particular aspect of the subject.
Some topics…
Anchoring—the first price you see affects the price of a final sale, even if the first price you see was a random number.
Sliding discounts—Don't raise prices, reduce discounts. Instead of selling something for $99, set it's price at $149, and offer a $50.00 discount. Over time if your costs go up, or you want more profit, then reduce the discount, to $40. Next, raise the price from $149.00 to $159, but also raise the discount from $40 to $50.00. This has the effect of slowly raising prices, without spooking your customers.
People don't think absolutely about happiness. They think about it in comparison to other choices.
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