Priceless: The Myth of Fair Value (and How to Take Advantage of It)

by William Poundstone

What prices are people willing to pay? Even as a computer science student, I had to learn about supply and demand curves in my basic economics course. These are based on the assumption that humans, as "homo economicus", always decide rationally.

Countless studies in recent decades have disproved this approach. Humans act highly emotionally. Numerous psychological factors influence the prices people are willing to pay.

For example, take the "anchoring" bias: people are exposed to a (usually very high) price before a purchasing decision. The higher this "anchor", the higher prices a buyer considers appropriate. Every supermarket exploits this effect: The most expensive wines are not presented because they are often bought – but because they pull up the price that customers find acceptable for mid-range wines.

This book is a collection of reviews of academic studies on price psychology, with exciting and often surprising findings, complemented by entertaining anecdotes from the lives of the psychologists and economists who conducted them.

The results are not only interesting for people who have to set prices, but also for us consumers. In our day-to-day confrontation with prices and purchasing decisions, it gives us a chance to reflect on the psychological tricks that have led us to believe that the price we are willing to pay is reasonable.

🎧 Suitable as an audiobook? The title is currently not available as an audiobook – should that change, it would be suitable as such.

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Genres

Behavioral Economics Marketing Psychology Business Strategy Decision Making