Priceless
the myth of fair value (and how to take advantage of it)
by William Poundstone · first published 2009
100% recommend
Why HN recommends it
Accessible tour of pricing psychology, covering research on anchoring, fairness, and charm prices like $49 versus $50; useful for anyone setting prices or curious how buyers judge value.
Summarised by Claude from recommending comments
Examines how "price consultants" and retailers convince consumers to pay more for less, and how negotiation coaches offer similar advice for businesspeople cutting deals 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
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I'm reading the book Priceless by William Poundstone which discusses the work of Kahneman and Tversky (among others) in great detail as it relates to the psychology of pricing (excellent read, btw). This is O.T from what the article…
on “Why Smart People Are Stupid” ↗I recently finished Priceless: The Hidden Psychology of Value by William Poundstone [1] A number of great lessons in this, but perhaps the key one was that pricing is not as much of a 'dark art' as many of us believe. There's a good…
on “The Dark Art of Pricing” ↗…Ultimatum Game have shown that people hate feeling like they're being ripped off, no matter how much we think they should just act rationally and understand the circumstances. A great book on this is Priceless by William Poundstone.
on “Uber upholds capitalism, (possibly) learns downside of price gouging” ↗I recommend the book "priceless." It goes through the psychology behind how you set a price. E.g. Why there are expensive wines on a wine list. https://www.amazon.com/Priceless-Myth-Fair-Value-Advantage/d...
on “Ask HN: How do you set prices?” ↗As for a book, Priceless by William Poundstone is an excellent read.
on “Ask HN: What is the field of economics studying “arbitrary” value?” ↗…will outsell their rounded competition by quite a way. It doesn't even have to be cents or pennies, something priced at $49 will outsell the one at $50. I remember hearing of one study (I read this in Priceless by William Poundstone, good book), that compared the exact same product sold at $44, $39 and $34 through a split-tested mail order catalogue. Obviously, the $39 outsold the $44 as it was cheaper - but…
on “Cognitive Lode – Brain gems for decision-makers” ↗I'll put on a vote for Priceless by William Poundstone, too (I haven't started predictably irrational yet because someone else had it on loan :)
on “Pricing psychology - 33% more beats 33% off” ↗