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The Myth of Fair Value (and How to Take Advantage of It)
Hill and Wang
January 2010
On Sale: January 5, 2010
352 pages
ISBN: 080909469X
EAN: 9780809094691
Hardcover
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Non-Fiction
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.
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