People who want to sell something tend to set the price far above what others think it’s worth. That’s human nature, but it isn’t just greed. The sheer fact that we own something affects our judgement as to its worth. PsyBlog details six reasons buyers and sellers (or owners and non-owners) don’t see eye-to-eye, and how some use these psychological quirks to increase business. http://www.spring.org.uk/2008/04/6-quirks-of-ownership-how-possessions.php
Newest 5 Comments
hah, of course in my example it would be fairer, make the second price $150,000 ;)
Abusive comment hidden.
(Show it anyway.)
If you apply archeology to this proposition, you can detect this study is flawed. The categorisations system these psychologists are advocating are culturally specific, conducting the same study in different cultures will give you different outcomes.
Abusive comment hidden.
(Show it anyway.)
most of this comes down to just plain greed. they charge more, because they want to have more money. there was an interesting NPR program recently where someone had done a study that determined that people for some reason feel that exact prices are lower than rounded-off prices (e.g. a $157,263 house is a fairer deal than a similar house at $160,000). that conversation and study seemed to have a lot more to offer than this one, because what they're talking about doesn't have this huge greed bias factor hanging over it.
Abusive comment hidden.
(Show it anyway.)
I think its strategic to have a higher price and then lower it.
Abusive comment hidden.
(Show it anyway.)
Interesting... But it doesn't really explain what's going on in the minds of people who, say, sell a hand-knitted hat for $5 (even if you're only charging minimum wage for labour, you're not even covering the cost of materials). Do items that are created just to be sold not follow this pattern?
Abusive comment hidden.
(Show it anyway.)