[ExI] Eliot Spitzer and the Price-Placebo Effect

[BillK]

On Tue, Mar 18, 2008 at 8:30 AM, Lee Corbin wrote:
<snip>
>  Now isn't that going a bit far?  For centuries and centuries, marketers
>  have known that price means a whole lot, but that packaging, salesmanship,
>  and other subtle effects also exist.  Example:  my grandfather ran a very
>  small store.  He kept it well lit and swept the floor because he really believed
>  that it encouraged customers to buy more of his products, (e.g. re-visit the
>  store).
>
>  "Based on our systematic, unsurprising irrationality"?  Surely a vast,
>  vast overstatement.
>

That's the book working!
You wouldn't buy a book that said that *occasionally* people make
mistakes when buying stuff, would you?  :) Everybody knows that. But
he is making a stronger claim than that, with experimental evidence to
back it up.

>
>  Makes sense.  Greater understanding is good---and there can
>  always be higher profit as well as higher customer satisfaction
>  obtaining as a result too.
>


Yes, That politician was paying well over the odds for sexual
services, but thought he was buying something really special, so
probably felt he got his money's worth.

Just like a 60,000 USD car is not twice as good as a 30,000 USD car.
Probably better, in some respects, if you like the extra trimmings,
but definitely not twice as good.

One experiment showed that even if you didn't want any of the extra
features, buyers still preferred it, because they thought they were
getting more for their money. Even if they didn't want the extra junk!

Reading the reviews and extracts provide more amusing examples.


BillK