For many people watching the Elliot Spitzer scandal unfold, the shocking part of the story was not that a powerful politician went to a prostitute. That seems almost retro these days. What seemed jaw-dropping was the amount of money Spitzer was paying out. Well, it turns out that the world’s oldest profession knows a thing [...]
Luxury vendors have long known that high price is part of their appeal. Not the price per se, but the exclusivity that comes with it. Like a peacock’s tail, the conspicuous consumption of goods that lack any practical purpose is a display of status, which has a powerful draw on the human psyche. New research [...]
As you may have noticed, the quantity and quality of posts has suffered since my writers have gone on strike. But like The A Daily Show, we’re back. Fittingly, when Jon Stewart returned to the studio last week, he had some things to say about pricing. The writers’ strike is mainly around residual payments on [...]
There’s an interesting article over at Fast Company on The Inevitability of $300 Socks, which talks about the formerly incredible notion of paying $300 for jeans. Remember when $50 jeans were “designer”? The authors, Dan and Chip Heath, argue that luxury is not simply about projecting social status or class, but about displaying appreciation for [...]
An alert reader sent in an article from the Wall Street Journal (free for one week) called The Psychology of the $14,000 Handbag, which delves into why stores offer, well, $14,000 handbags, and what this means for the rest of us, even if we might prefer to buy a car instead of a bag. The [...]
From Mental Floss, here are 5 Ballpark Promotions that Went Wrong. Example number 1: 10-cent beer night.
Recent research by Akshay Rao and Haipeng Chen confirms that people have a hard time processing a sequence of percentage discounts. For example, if you have a $100 item at 20% off, and then take another 20% off, what is the price? In most cases, it’s 20% off $80, or $64, not $60. The researchers [...]
Jason Calconis has a funny post about a hotel charging $2.80 for a cup of coffee. I’m not sure how much you get to complain about coffee when you have a $400 hotel room, but the point is legit. People hate to feel gouged. The real gems are in the comments, however. Many readers point [...]
Josh Kopelman over at the Redeye VC blog has a great post (see image from post– click for larger image in original post) on the importance of the part of the demand curve when the price moves from “free” to “not-free.” As a venture capitalist, Josh focuses on the need to understand how hard it [...]
How much would you pay to sleep well? For someone who sleeps like a log on a 10-year-old, $400 mattress, the answer is probably: not much. For people who don’t sleep well, or don’t get enough sleep, the answer can be: almost anything. Many people who are busy, under stress, and don’t sleep well conveniently [...]
