How Sellers Manipulate You With Decoy Pricing

Sometimes numbers lie. Assuming you have no innate preference towards either of the two colors, it might be hard to choose between a red Civic and a blue Civic. If instead you have a choice between a red Civic, a blue Civic, and a red Civic without air conditioning, the choice becomes much easier. Dan Ariely in his book Predictably Irrational says his research shows that most people would choose the red Civic with air conditioning over both the other cars. Details inside.

Regarding the graphic above, Ariely writes:

Option (A) is better on attribute 1–let’s say quality. Option (B) is better on attribute 2–let’s say beauty. Obviously these are two very different options and the choice between them is not simple. Now consider what happens if add another option, called (-A). This option is clearly worse than option (A), but it is also very similar to it, making the comparison between them easy, and suggesting that (A) is not only better than (-A) but also better than (B).

It’s called decoy pricing, and stores use it all the time to get you to buy what they really what you to buy.

For instance, as another example in the book shows,

An ad for an Economist subscription gave 3 options

1) Print-only for $59
2) Web subscription only access for $125
3) Print and web access for $125

Obviously 3 looks like the best deal. In an experiment Dan ran with this setup, 16 subjects chose option 1, zero chose option 2, and 84 chose option 3.

What if we remove option 2 and have people choose between print-only and print and web access, all at the same rates? The results should be the same, right, after all, it’s the same deal. Instead, the results changed dramatically. 68 chose print-only and 32 chose print and web access. It was only by option 3′s relation to option 2 that made option 3 look so good. The subscription marketers at the Economist knew this and used it to boost their sales.

Can you recall any instances of decoy pricing you’ve seen?

Comments

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  1. ffmariners says:

    First thing that came to my mind was computers… when you are comparing brands… not sure, though

  2. christoj879 says:

    I remember selling vacuums and there were two middle-high end vacuums; one was better than the other, and anything above it was too high in price and anything below was a piece of crap. The customer invariably picked the cheaper of the two, thinking they got an awesome deal.

  3. ConsumptionJunkie says:

    Is this similar to the bait and switch? Many stores will bait you with the promise of low prices but switch you to a more expensive purchase.

  4. ffmariners says:

    I hate when people use the term bait and switch because a lot of people do not know the difference between high pressure sales and a truly fraudulent circumstance of bait and switch. (Not you ConsumptionJunkie, but your comment made me think of that)

  5. The Stork says:

    @ConsumptionJunkie: Not really. B&S requires an advertised product to not be available. Here they may be trying to fool you, but you can always buy the best and/or cheapest option.

  6. balthisar says:

    I don’t know about the examples. Maybe on an impulse purchase, in which case I don’t care about overpaying or price analyses or anything. I don’t spend more than I can afford, so on an impulse purchase, I just don’t care. I don’t bother trying to think about it.

    But say for a car? That’s a major friggin’ deal. I can’t see myself ever being swayed but something so silly. In fact, I’ll probably have already made the decision before I ever’d step foot onto the lot.

    Maybe a little lower on the scale. I’m considering an entry-level DSLR. To me, the price range for these takes them out of the “impulse buy” category, and so I’m putting lots and lots of thought into it. On the other hand, I guess there are people that just wander into Best Buy and trust the 19 year old kid. Maybe they’d walk out of the deal on the wrong end for the reasons stated in the article?

  7. rmz says:

    @ConsumptionJunkie: Nah, this is just smart psychological marketing.

  8. MaytagRepairman says:

    Hmmm. Sharks with lasers, seabass with lasers, and seabass without lasers. Yeah, definitely pick the seabass with lasers.

  9. MaytagRepairman says:

    I was at Villan Depot yesterday. They had sharks with lasers, seabass with lasers, and seabass without lasers. I picked the seabass with lasers.

  10. obbie says:

    so this is like when the hott girl hangs out with the “not so hott” girl to make her self look better? ahhh gotcha

  11. dorianh49 says:

    OK… Chicken McNuggets, Burger King Burger, or Burger King Burger WITHOUT Used Condom. What’s it gonna be?

  12. sean77 says:

    It’s similar to how no one wants to buy the *most* expensive item, but they’ll buy the second or third most expensive. They won’t even look at the least expensive items.

    Look at hdmi cables.. everyone goes for the $10 cable, no one gets the $60 monster cables and no one gets the 99 cent cables, even though there is absolutely no difference between any of them.

  13. dorianh49 says:

    @obbie: Close. There needs to be a third option, though, like a drag queen, or an inflatable gerbil.

  14. RChris173 says:

    This reminds me of economics and opportunity costs with a production possibilties curve…hehe

  15. weakdome says:

    @obbie: no. This is like when you have to choose between REALLY HOT GIRL by herself, and Not-quite-as-hot-girl who is standing next to an ugly girl so she looks better in comparison.

  16. spinachdip says:

    @balthisar: I don’t know, it seems like higher the price, more irrational the consumer. See, we’ll coupon-clip and bargain-hunt to save on groceries, but when it comes to cars or houses or yachts, the people are more emotional, and the comparisons become more difficult (while the example cited here is useful, purchasing crieria are very seldom isolated like that).

  17. wring says:

    are we gonna factor in that red cars have a higher chance of getting a speeding ticket?

  18. Geekybiker says:

    We do a similar thing in art with clients (internal or external) You deliberately make something with a mistake that you already have fixed or intend to fix. That way the client had something to spot and point and and then feels good about the “improved” product afterwards.

  19. Kirk Douglas says:

    Yeah I’ve noticed that Future Shop does it. They’ll put two nice let’s say, Gateway machines next to a bottom of the line, let’s say Compaq. Then beside the two Gateway machines, they’ll put a long list of things that they do, that the Compaq doesn’t. Obviously the two Gateway machines are better, right?

    Well here’s the kicker, the one Gateway machine doesn’t exactly have the same features as the other Gateway, but you’d have to really read the specs on the little product card with the price to find that out. Most people would just grab the cheaper of the two and be done with it, and find out later it might not have the same features as described. But then again, if you’re going to pay Future Shops’ hilariously inflated prices, you probably don’t care about features in the first place.

  20. bearymore says:

    Wine shops use this kind of tactic. They’ll put expensive bottles of wine on display at the end of a rack. That way, if there is a $75 bottle on display, you’ll stay away from the $10 wine and buy the $30 bottle instead so as not to either appear cheap or buy seemingly low quality wine.

    At a restaurant, never buy the second cheapest bottle of wine on the wine list. That is almost invariably the biggest selling bottle among less knowledgeable customers. They don’t want to seem cheap, so they won’t buy the lowest priced bottle, yet they don’t want to spend a lot of money on products they’re not familiar with. Often this is the wine that will provide the restaurant with the best margin.

  21. dualityshift says:

    As someone who grew up in the automotive retail industry, I can say this is only one of many ways to make numbers lie.

    Another example of how they use numbers to turn a profit is to ‘qualify’ you, whether you have your own financing or need them to get you financed. If you need them, you are categorized as a payment shopper.

    When it’s time for negotiation, the sales representative will work that payment angle, asking you how much a month you can afford. You tell them, they go to the manager to see if it’s approved, and they come back with a counter-offer $45/month more.

    “It’s only $45. I know you can swing it,” is usually the pitch you’ll get. Over 5 years, with a new car manufacturer’s 3.8% interest, that’s about $2964.00 added to the price of your car, which you don’t know because you’ve been working the monthly payment. You have the right to ask, before you finalize any deal, to know what the final, out the door cost of the vehicle. Don’t expect to always get the truth.

    Even though your financial contract gives you a final owing balance over the term, most people don’t see it until it is too late. The dealer has no motivation to verbally disclose to you what is printed on your contract.

    When shopping for a car, bring your own financial calculator, or know ahead of time what your purchase numbers are.

  22. heypal says:

    @dorianh49: that’s only if they’re selling you the “not so hott” girl.

  23. dreamcatcher2 says:

    For all fans of economics who never quite felt that the field of econ was living up to its full potential, Predictably Irrational is an awesome read. It’s a highly accessible introduction to the relatively new and brilliant field of behavioral economics. I read it cover to cover in 2 days, because I could hardly put it down.

  24. @balthisar:

    Your dSLR is a good example.

    Assume for a momemt that all cameras are the same (I know they are not, but assume that fact for a momemnt. Also assume the MSRP is identical, as is the discount price to the vendor.

    Decoy pricing can be done several ways and to achieve several objectives.

    First is the low price. Got a lot of units in stock, sell them cheapest.

    Second is the middle price. Got some in stock, not necessarily a lot of them, so not real eager to sell that stock (’cause would then have to order more…. and the new model year is coming out).

    Third is the highest price. High price is better to some customers. Reinforce that fact…. put the item on the endcap as the featured product. Fill the store with lots of manufacturer promotional literature and displays. Tell your 19 year old selling studges to push that brand and make $2 for every one sold.

    And now the store has manipulated the products. Tightwads get their “I pulled one over on the man” price leader. Easily impressed customers get “directed” into the highest price model. And the middle priced product sits because that is exactly what the store wants to do with the brand.

    Find decoys all over the typical electronics company (B&M and ‘net) with price incentives, special offers, featured product placements etc on the units they want to sell.

  25. B says:

    @aquaregia: If you have 10 regular beans and 1 magic bean, I would expect you try to sell more regular beans. However, basic economics says you should charge less for the regular beans because they have a higher supply.

  26. Jetfire says:
  27. rpm773 says:

    Examples of Decoy Pricing? Yup, last year.

    I was at Walmart and needed to get some wooden ducks for the big hunting trip with the boys. Bought a bunch of them, too.

  28. godlyfrog says:

    The only part that doesn’t seem logical to me, and is something I’ve never seen, is how A being better than -A makes A better than B. I can see how if they’re selling A for $20, and they’re selling -A for $18, but the benefits are much greater on A how I’d buy A, but if B is also $20 and has a completely different feature set, I’m still going to be torn between A and B, I’ll just have left -A out of the picture.

    I agree in theory to the concept that -A being badly priced makes A look like it’s cheaper than what it should be due to the similarities and therefore seems like a good deal, but I think this is highly situational and is hardly common behaviour.

  29. notallcompaniesareevil says:

    @aquaregia: I actually dislike a lot of what this site posts. I think many things are more of a disservice than a help and do real damage. This post, however, I think is fine. It actually is educating. It does inform. I like it.

  30. humphrmi says:

    @dreamcatcher2: Heh, funny you mention that because everyone in my department at work (I’m an IT Engineer) thinks I’m weird because I consider myself a closet economist. After I had finished my Engineering major work in college, I had a few electives and English classes to take, so to fill out my schedule I took Econ classes. I fell in love with Economics then.

    Thanks for the tip, I’m going to check this out.

  31. Where’s the car that’s satisifies both criteria A and B? As far as I’m concerned, they’re both decoys to keep me unhappy so I’ll try again when the new models come out next year.

    I can’t think an example of where a obvious decoy might have affected my decision, but I’d actually thank them for throwing something into the mix. I hate making decisions where I have to decide which of my desire is most important.

    I could go on and on with tedious recent examples where I was faced with the A xor B choice: cameras (DSLR and point-and-shoot), surge protectors, light bulbs, digital pianos, LCD projectors, stereos, travel mugs, insulated staples, occasional chairs…

  32. SuffolkHouse says:

    @godlyfrog:
    A becomes better than A- AND B because A has a positive valence attached to it.

    Sally and Tammy are both hot, but Sally’s sister is a prude. This makes the fact that Sally puts out salient to me. I attach that meaning to Sally, but not necessarily to Tammy.

    This is semiotics.

  33. astrochimp says:

    “[His] research shows that most people would choose the red Civic with air conditioning over both the other cars”.

    Maybe more people prefer red over blue. Even if blue has air conditioning, too.

  34. SuffolkHouse says:

    @shake1dde:

    Yes, someone selling something is going to do what is necessary to sell it. However, these ideas are counterintuitive. One only knows how this works by studying consumer behavior. So you can always conclude that people will try to sell things as best they can, but that doesn’t explain HOW they do, especially how those most effective do it.

  35. evslin says:

    @MaytagRepairman: 100 cocktails to you sir. That’s excellent.

  36. FLConsumer says:

    @sean77: Sadly…I’d say the majority of retail-store shoppers buy the $60-120 Monster Cables… They’re totally clueless that you can buy good HDMI’s for $10-20 off Monoprice.

  37. spyz88 says:

    right away I thought about the iPhone 3G…

  38. petrarch1608 says:

    hmmm, i gotta say, i’m harsh on consumerist sometimes, however this is good reporting, well done

  39. u1itn0w2day says:

    Isn’t that what helped cause the mortgage mess-selling dreams/greed or dream house BEFORE the ARMs were introduced into the equation?In other words you have 3 choices:

    1) the house you want
    2) the price range you want
    3) the house you want at the price we want.

    In others it’s selling by feature to disquise the price?

  40. garbagehead says:

    @MaytagRepairman: thanks for clearing that up. For some reason I have always understood seabass economics better than any other

  41. Corydon says:

    @Jetfire: Interesting examples. That clears up the whole idea considerably, especially the Wikipedia MP3 player one.

    It seems to me that the easiest way to avoid this sales tactic is to know what you want.

    To follow up with the MP3 play example, if I know I want to be able to store the entire Ring des Nibelungen on a player at a particular bit rate, I can calculate that, look for the players that meet my capacity needs and choose between them based on price.

    Granted, things get more complicated the more features there are to choose from, but if you clearly think through your needs, you can pick the features that are important to you and ignore the rest.

    This whole effect seems set up to take advantage of people who browse and buy on impulse. You avoid this in the same way you avoid impulse buying in the grocery store—make a list of what you need and stick to it.

  42. TechnoDestructo says:

    @aquaregia:

    What the fuck, man…this post is doing everything you say it isn’t doing and should be doing.

  43. u1itn0w2day says:

    @Corydon:-targets impulse buyers and know what you want.I think you summed it up right there.

    I think that’s how they get people to buy those stupid warranties with the feature being piece of mind for x dollars more.

    Most stores probably don’t want the disciplined customer who knows what they want.If you know what you want you probably did research which makes you less susceptable to alternate choices.

  44. Geekybiker says:

    @Michael Belisle:
    Obvious decoy? How about soda at the movie theatre? You have a couple sizes, the smallest being an outrageous price. However the sizes are only priced a quarter or so apart and so its an easy upsell because “you are getting a better deal” Never mind you’re still getting soaked on the the price.

  45. Trai_Dep says:

    This is core 101 Marketing, doubters. :)

    It’s not bait & switch, it’s more anchoring.

    Say, the dSLR example. A Nikon and a Canon. And a Canon that has a slightly slower max ISO setting. Adequate, except for, say sports shots in a somewhat dimmer than usual gymnasium. The first Canon now looks better, even though, for the vast majority of the prosumer market, the feature set is identical. And, if it looks better, there’s more implied value = more demand = less price elasticity.

    Even though if you compared the first Canon with the Nikon, the Nikon’s better (lenses, accessories and, dare I say, the body itself), some undecided shoppers would trend towards the first Canon.

    Don’t focus too much on the price aspect, since that’s only one axis of the bundle of benefits. Shopping just on price is for rubes.

  46. mike says:

    I haven’t decided yet if this is ingenious or evil.

    I would agree that I’ve fallen victim to this. I can’t recall a time but I know I have because I followed the logic.

    It doesn’t have to be related items either. It could be two different purchases that, in your mind, are equal. For example, buy a car or by cabinets. Obviously, cabinets return your investment when you sell your house. But you may need a car to continue making payments on said house.

    But then you find out that the car you want just became less expensive.

  47. @Geekybiker: Ooh, that sounds like a superbly simpke example. I don’t go to the movies, but there is a restaurant that sells a 16 oz soda for $1.25, or a 24 oz for $1.50. Ignoring the fact that I really want a 20 oz, I tended to pay the extra quarter at first. But lately, I decided a quarter is a quarter and refills are free, so I downsized to the stupid 16. I guess the easy upsell is the reason why that 16 sucks so much.

  48. choinski says:

    For more insightful graphs & Scattergrams:

    [andrewsullivan.theatlantic.com]

  49. mmstk101 says:

    @SuffolkHouse: That example is just plain awesome.

  50. godai says:

    @godlyfrog:

    If you want to be more beautiful, hang around with ugly people.

  51. chrisjames says:

    That’s sort of an outlier case in decoy pricing. The much more common decoy pricing is something we’re all very familiar with, and is a cult favorite here at the Consumerist: bulk discount. People are conditioned to buy in bulk, buy larger packaging, buy options, or buy bundles because there’s the implied promise of a few bucks off the total price. Playstation bundles, for example. Buy the undercoating and get some options thrown in free, for another. Like we’ve often seen here, it’s not always the case you’re getting a better deal, or even paying less than if you just bought individual components. You should be aware of exactly what you’re getting, what you are paying for it, and, if possible, what you could be paying for it elsewhere.

    In fact, that really should be tip #1 in all things Consumerist, and it would be nice to see something like it mentioned explicitly in such posts.

  52. JMB says:

    The example provided in the book (a great read, by the way) is for subscriptions to The Economist.

    (1) Economist.com subscription $59
    (2) Print subscription $125
    (3) Print & web subscription $125

    Since it’s hard to compare (1) to (2), most people end up comparing (2) to (3) and end up purchasing (3) – simply because it seems like a better value. The author did some research and found that most people would choose option (3) rather than (1) or (2). When he removed option (2), more people ended up choosing (1) rather than (3).

  53. Scoobatz says:

    @Trai_Dep: Having recently purchased a digital camera, I think this is a great example. Companies are extremely clever with their price points with respect to electronic items, in general.

  54. AstroPig7 says:

    @aquaregia: You really don’t understand the point of this site, do you? Note the word “consumer” in the title.

  55. catcherintheeye says:

    @notallcompaniesareevil: What the fuck are you doing reading this site then? Or is my sarcasm detector off?

  56. Nytmare says:

    Everything that has transpired has done so according to my design. Your friends, over there on my retail auto lot, are walking into a trap. It was I who allowed them to know about the AC option on the red car! The blue car is quite safe from your pitiful little band.

  57. AlexMax says:

    @aquaregia:

    I assure you, the author was *NOT* railing against those who sell. I just saw this guy speak (talk about timely), and on the contrary, it was an academic pursuit of his and I was in a crowd of MBA students and they were very interested in this topic for obvious reasons. I think that knowing WHY we make decisions is something that we can all benefit from, and trying to characterize this as ‘railing against those who sell’ is disingenuous.

  58. notallcompaniesareevil says:

    @catcherintheeye:

    “What the fuck are you doing reading this site then? Or is my sarcasm detector off?”

    Well, I’m not swearing, that’s for sure. Seriously, though, I’m here to learn things, to see things from other points of view. As I mentioned, I often disagree with what is posted here, and to the extent I can lend another viewpoint the discussion, I think more people can be bettered for having visited. Confirming your opinion every day leads to a dull existence. Challenge it, my friend, even if the challenges fail.

    And for the record, there is no sarcasm in my sentiment that this post is actually very interesting. I think it’s one of the most educational ones to come along in a while. Worlds better than the mass of “OMG, this sign implies the sale price is higher than the regular price! Everyone point and laugh and then never shop at Wal-mart again!”. :-)

  59. Snarkysnake says:

    I see a lot of this kind of thing that is in the example,but I think that the real “decoy pricing ” being practiced now involves hidden fees and charges that are not mentioned until near or at the very end of the transaction. ( By this time you will have invested quite a bit of time and effort and have some emotional involvement in the purchase, making it hard to back out over a small fee)

    Examples – Heartland America sends me tons ofcatalogs. Dump trucks full of them. There are things in there that look interesting. But at the bottom of the order page and in the catalog printed order form,there lurks a $2 “order processing fee”. Deal breaker.” Order fulfillment is a cost of doing business. I use their catalogs as fire starters…

    Car dealers- I am currently trying to buy a used car. An undisclosed $599 ” doc fee” sent me packing after we negotiated the deal. (This is a 10% bump on a $6000 car that I was buying). Again, the disclosure came too late in the deal to allow apples-to apples pricing comparisons.

    Cell Phones- It used to cost money to make money. It now costs money to spend money. Lots of companies are now charging you for paying in cash.

    Business has always been about sharp dealing,but it seems like big companies spend almost as much effort to get into our heads as they do to get in our wallet.

  60. Tremblor says:

    I like how a lot of people are saying “I wouldn’t fall for that” but

    A) it obviously works or they wouldn’t do it, and

    B) something like 90% of people think they are “above average”

  61. reykjavik says:

    This is common with household durable goods. Instead of lowering the price on a lower quality model, they come out with a higher quality model at double the price.

    Before you had the option of buying an expensive household item, or not having one at all. But NOW, you have the option of buying a less expensive household item or a more expensive household item. Guess what everyone picks? They gimmicked you into buying it.

  62. toddvm says:

    It’s about choices. If you see that option C saves you money then you choose it. Option B could have it’s price bumped up to “encourage” you to choose option C, but once again would someone choose option B and get the lesser deal?
    Being able to walk from the deal and find a better one elsewhere is what isn’t mentioned here. This tactic is used with extended warranty’s. You have already made the decision to buy so now do you go for the one year or two year extended warranty. A.) who wouldn’t want to insure their purchase for a few dollars. B.) 2 years is only $50 where 1 year is $40. How many people would say, “Forget it…I don’t want the thing”. Then how many people would say, “Forget it…I am not insuring it. I know it will never break.” Then how many people would say, “Forget it, I only need 1 year even though 2 years is the much better deal”.

    It’s all about choices. If you know what you want and the value of it, then presenting a phony option to “encourage” you to pick what the store wants you to purchase shouldn’t pursuade you.

  63. Wasabe says:

    Hey-y-y-y….I wrote that Wikipedia article.

  64. Trai_Dep says:

    @Wasabe: Really?
    Excellent work in making a complicated process understandable to the laymen. Inspired examples, exploring both axes of consideration. Simply awesome job!

  65. kerry says:

    My most memorable instance of decoy pricing has been with iPods. Back around the third generation of the device, you could be the lowest end version for $350, the mid-range version for $450 and the high-end version for $500 (or something like that). It seemed totally silly to buy the mid-range device, even if that’s the size you wanted, since the most expensive was only a relatively small amount more. So, basically, if you wanted anything but the cheapest device you felt better off buying the most expensive option.

  66. gjaluvka says:

    @Michael Belisle: You’ve hit on one of the two economic pet peeves of my teen years, one more obvious than the other:

    1) if you are eating in and the place has free refills, what kind of numbnut orders anything other than the small drink?

    2) OK so you’re taking geometry, like, right now over at the high school, dude, and you walk out of school, step into the pizza hut and tell me that the 16″ pizza is twice the size of the 8″?

    And no there weren’t cool independent pizza joints in central North Carolina in 1980. So don’t go there.

  67. gjaluvka says:

    @notallcompaniesareevil:
    Thanks Maharishi

  68. gjaluvka says:

    @kerry: Disney World loves this approach 1 day is like 90, 2 days is 175, by the time you get up to the 4 and 5 day tickets, you’re spending a few pennies a day extra to extend. So it’s hard to say no.

    But of course the onsite hotel still costs $150 or so per night and the food will still set up back triple figures most days yada yada yada. It’s a model of brilliant marketing.

  69. HeartBurnKid says:

    @aquaregia: Once again, you assume negativity where there is none. This is an interesting article on an extremely common sales tactic, not some kind of vitriolic rant. The purpose here is to forewarn a consumer, so that they can recognize this tactic and respond in a more savvy manner.

    Only a scammer wants their customers to be ill-informed.

  70. JPropaganda says:

    @balthisar: Completely off topic, and i apologize, but I’m a big fan of Nikon. The D50 and D40x are great cameras.

    Just throwing that out there. Complete disclosure: there was one time in my life when I wrote Nikon advertising. Not anymore, haven’t had Nikon as a client for over a year. Just making sure you know this isnt some marketing douche seeing someone on a forum and saying “I can convince him to get a nikon.”

  71. Channing says:

    I lurv Economics.

  72. notallcompaniesareevil says:

    @JMB: Having actually had to make that exact choice, I can say that’s pretty much how it works. I assume that part of it has to with the fact that the marginal cost of the online subscription to the publisher is zero.

  73. notallcompaniesareevil says:

    @gjaluvka:

    if you are eating in and the place has free refills, what kind of numbnut orders anything other than the small drink?

    The numbnut who takes a glass with him when he leaves.

  74. fishiftstick says:

    Let’s say this effect works. Let’s say you fall for it. Whose fault is it that you can’t be bothered to think rigorously before spending?

  75. SayAhh says:

    @rpm773: LMFAO

  76. ninjatoddler says:

    Hey. You’re giving away the tricks of the trade.

  77. zanhecht says:

    8GB iPhone 3G: $199
    8GB iPod Touch: $299

    Clearly the iPod Touch is a decoy designed to get you to choose the iPhone 3G over other “touch” phones.

  78. SacraBos says:

    @Geekybiker: Yeah, and if I pay the extra quarter and drink that extra large drink, I’m going to soak my seat, too.

  79. billmarty says:

    @zanhecht: I’m sure if you sign on for two years of cell service, AT&T will give you an 8GB iPod Touch for $99!

  80. theczardictates says:

    One great example is the funeral casket industry in the US. Read The American Way of Dying to understand how a funeral director will steer you from the pine box you wanted to the Luxurious Ultrasuede-lined enameled metal casket your deceased loved one would really appreciate if he/she weren’t… uh… stiff.

    One reason this works is that for most of the things we buy, we really have no idea what they are actually “worth” other than by immediate comparisons. Is regular gas worth $4.06/gallon? Beats me, I have no idea how much it costs to make and distribute gas. But if Super Unleaded is $4.36, I guess $4.06 for regular is a good price.

  81. ajones4 says:

    Gilette does this notoriously with their razors. Check out the price of the blades.