Priceless

The myth of fair value--and how to take advantage of it.

by William Poundstone

Super-Sizing the Price

Pity the summer tourist in New York, the city where everything is more expensive than it is back home. Last month, Serendipity 3, a popular New York eatery, introduced a $69 hot dog. It's further proof of how relative prices are, and how easily we're manipulated. Read More

Why No One’s Saying What Charlie Sheen Got

At the moment, the biggest secret of TV is how much money CBS had to pay Charlie Sheen to continue his hit sitcom, Two and a Half Men. The network knows the psychological effect of a big number. Just look what happened to NBC and Jerry Seinfeld. Read More

Monetizing the Male Ego

Men can't resist paying a premium for "Extra Large" condoms. The condom industry has made a science of converting inches to dollars, but "extra large" is mostly in the customers' heads. Read More

How Much Should an eBook Cost?

The iPad bookstore is matching Amazon's prices on some titles, while Amazon is raising some prices. Read More

Cash and Calories

Obama's health care bill says restaurants must post calories on the menu. "Nanny state" intrusion? Not according to the restaurant industry, which supports the new regulation. The reason may have less to do with waistlnes than the bottom line. Read More

Sticker Shock Hits Disneyland

When Disneyland opened in 1955, admission was $1. Today it's $72. Walt Disney was a pioneer of psychological pricing — but can anything persuade families to pay today's theme park prices? Read More

Curse of the $8 Blanket

How can you run a business when customers hate you? Airlines are trying to figure that out. The real problem may not be the airlnes but human nature. Read More

Offers You Can't Refuse

Don't think of an elephant! D'oh, you just did. As this demonstrates, there are some limits to "free will." A largely robotic part of our minds helps determine what we think about. Some tricks of psychological pricing exploit this. They present offers you can't refuse. Read More

Home Won't Sell? Try Two Prices Instead of One

Houses aren't selling, and behavioral economists say sellers are to blame. But a psychological pricing trick can help sellers get more and better offers. Read More

Does 9 Just Sound Cheap?

From "invitation only" high-fashion web sites to the 99 Cents Only Store, prices ending in 9 have a strange attraction for value-conscious shoppers. A new study suggests that the poetry of prices can be as important as the math. Read More

Maddest of the “Mad Men” (Part 3)

What if it was possible to persuade consumers to buy without their awareness? Today's marketers use the new psychology to do just that. Read More

Maddest of the “Mad Men” (Part 2)

James Vicary, prophet of psychological marketing, gambled his career on a hoax—and lost. Read More

Maddest of the “Mad Men”

Mad Men presents the advertising world as an exercise in moral ambiguity. That perception has much to do with James Vicary, ad man and con man. He's more relevant than ever in the age of Google. Read More

How Much Is Enough?

How the psychology of fair value (literally) shapes the products on market shelves. Read More

Pricing the Snuggie

The Snuggie, the "blanket with sleeves," may be an Irony Belt punchline, but somewhere, in a less jaded America, 20 million have bought it. Like other infomercials, the Snuggie pitch uses some powerful tricks of psychological marketing. Next to that, logic doesn't count for much. Read More

Who Are You Going to Believe, Me or Your Own Eyes?

A classic illusion shows how marketers convince us that expensive is cheap and luxury is necessity. Read More

Decoding Fast-Food Menus

Not sure what size coffee to order at Starbucks? Chances are, you'll order a "Grande." Here's a field guide to the psychology of fast-food menus. Read More

The Gender Surcharge

Markets offer men's and women's versions of Excedrin, Schick razor blades, Degree antiperspirant, and dozens of other popular items. The women's price is almost always higher than the men's. Why? Read More

Money for Nothing

Americans spend a billion dollars a year on "virtual" merchandise existing only in cyberspace — everything from avatar tattoos to imaginary private islands. Social network sites like Facebook have mainstreamed the virtual marketplace, selling trinkets and gag gifts to post on friends' pages. The business says a lot about the real-world purchase decisions we all make. Read More

“Artisanal”: A Word That’ll Cost You

"Artisanal" is more than a foodie cliche. It's become one of the magic words of marketing, an open-sesame to consumers' wallets. You can spend $80 for artisanal chocolates or $350 for artisanal jeans. The word's power says a lot about how we decide what price is worth paying. Read More

Do Dates Order the Most Expensive Entrée?

Those who pick up many checks on dates might swear the other person always chooses the most expensive item. A new study says otherwise. Read More

“10 for $10”

"Ten for $10" pricing has become a sign of the Great Recession. You're invited to buy ten of something for $10. Small print says "$1.00 each." Huh? That's right, there's no discount for buying ten items. So what's the point? It may be a clever psychological ploy to get shoppers to fill their carts. Read More

Living Next to the Obamas: Worth $500,000?

The home next to Barack Obama's in Hyde Park, Chicago, has just gone on the market. It will probably sell for a premium because of the Obama connection, but who can put a price on that? The sellers aren't trying, listing the house with no asking price. A classic study on the psychology of prices suggests that it's better to set a high asking price for an item of uncertain value. People are swayed by asking prices even when they know better — and that includes real estate professionals. Read More