| Priceless: The Myth of Fair Value (and How to Take Advantage of It) |  | Author: William Poundstone
Publisher: Hill and Wang
Category: Book
List Price: $26.99
Buy New: $14.20
as of 9/6/2010 20:33 CDT details
New (33) Used (18) from $14.15
Rating:  22 reviews
Sales Rank: 30,909
Media: Hardcover
Pages: 352
Number Of Items: 1
Shipping Weight (lbs): 1.3
Dimensions (in): 9.5 x 6.4 x 1.4
ISBN: 080909469X
Dewey Decimal Number: 338.52
EAN: 9780809094691
Publication Date: January 5, 2010
Availability: Usually ships in 1-2 business days
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| • | ISBN13: 9780809094691 | | • | Condition: New | | • | Notes: BUY WITH CONFIDENCE, Over one million books sold! 98% Positive feedback. Compare our books, prices and service to the competition. 100% Satisfaction Guaranteed |
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| Editorial Reviews:
Product Description
Prada stores carry a few obscenely expensive items in order to boost sales for everything else (which look like bargains in comparison). People used to download music for free, then Steve Jobs convinced them to pay. How? By charging 99 cents. That price has a hypnotic effect: the profit margin of the 99 Cents Only store is twice that of Wal-Mart. Why do text messages cost money, while e-mails are free? Why do jars of peanut butter keep getting smaller in order to keep the price the “same”? The answer is simple: prices are a collective hallucination. In Priceless, the bestselling author William Poundstone reveals the hidden psychology of value. In psychological experiments, people are unable to estimate “fair” prices accurately and are strongly influenced by the unconscious, irrational, and politically incorrect. It hasn’t taken long for marketers to apply these findings. “Price consultants” advise retailers on how to convince consumers to pay more for less, and negotiation coaches offer similar advice for businesspeople cutting deals. The new psychology of price dictates the design of price tags, menus, rebates, “sale” ads, cell phone plans, supermarket aisles, real estate offers, wage packages, tort demands, and corporate buyouts. Prices are the most pervasive hidden persuaders of all. Rooted in the emerging field of behavioral decision theory, Priceless should prove indispensable to anyone who negotiates.
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| Customer Reviews:
Showing reviews 1-5 of 22
 Explains how the "Fair Price" is determined, and why this price is relative, not absolute. August 22, 2010
Steven Chambers (Las Vegas, NV USA)
I found this book to be an entertaining and well-researched romp through the strategy of pricing and human decision-making. Here is the basic lesson of the book - Prices are not an absolute and the perception of a "fair price" is subject to manipulation and positioning. By using the right techniques and taking advantage of certain cognitive fallacies and biases that we all have just about any price for an item can be made to look fair. How to accomplish this is explained throughout the book.
First off, there is no such thing as a "fair price". Pricing is based on our perception about what is fair and our subjective idea of a particular item's value. This perception can be manipulated, unknown to us, by factors such as anchoring (very powerful), priming and framing, which are the three most powerful tools in the persuasive toolbox.
I love learning how the mind works and how we act and make decisions so for me this was a fun and informative book to read. I enjoyed reading the book from cover to cover, not only for the subject matter, but also because I like the emphasis on scientific studies and practical experimentation that backed up the information in the book. While I like my information delivered in this manner I can see how others might find it dry and maybe a little too academic. That is something to be considered before picking up this book.
As mentioned previously, the three primary persuasive techniques covered in depth were priming, framing and anchoring, with most of the studies exploring these these subjects being based on the Ultimatum Game. If you don't know or are curious about what the Ultimatum Game is, including it's many variations, then this is the book to read. He covers just about every variation of playing the game that exists. I found the knowledge imparted from these studies to be very insightful and valuable.
The information in this book was so valuable to me that it's one of the few books I've read with a highlighter and notepad at the ready so I could capture the various strategies for use in my business. Just how powerful are the techniques of anchoring, priming and framing? More than you would think. I've taken some of the things I learned in the book and use it in my daily business life. I am now more aware of the effect priming, framing and anchoring have on people, myself included, when it comes to our feelings about how things should be priced.
All pricing is based on psychology, something about which most of us have a limited understanding. We tend focus way too much on the cost in dollars of an item and not enough on the value of a particular item to us personally. Interlaced with our perception of value is our concern with not being "taken advantage of" or looking out of sync with the group. Prices are best viewed relative to other prices and not solely in and of themselves. It is rare that a price stands alone because that gives us nothing to compare to it. Provide that comparison, obviously positioned to be favorable to ourselves, and we can make a price appear however we want it to appear, as a great bargain or overly expensive.
Everyone should know the techniques used to manipulate our perception of price, whether on the consumer side or as the business owner. We are all being influenced and persuaded unconsciously and unknowingly all the time. Knowledge of how this is done is the best way to be sure you get the best value for yourself in any consumer encounter.
 Contrasts Matter Most - Absolute Values Do Not July 27, 2010
James East (Orlando, FL)
2 out of 2 found this review helpful
Herbert Simon's most enduring contribution is that we are confined to our own `bounded rational'. We are too busy, to ill-informed, and occasionally too boneheaded to think things through. Therefore, our decisions resort to heuristics, or mental shortcuts, to arrive at quick, intuitive choices.
In addition as we learn in 'Priceless', our mental intensity to subjective perception follows the characteristics of a power curve law. Examples of this mental intensity include: it takes 1.7 times the amount of sugar in a soft drink to double the sweetness perception. On the other hand, it takes a light bulb 4 times brighter to double the brightness perception.
What this all leads us to, is that the cost of being so acutely sensitive to contrasts, and ratios, is a relative insensitivity to the absolute. Without a basis for an absolute 'price', we use our mental shortcuts to determine a value and/or price. Merchandisers of course know this, and subtly pull and yank our chains to influence our decisions which may not be of the best value.
In the end, we are influenced mostly by contrasts (comparative assessments) which matter the most, and absolute values do not matter as much, and only sometimes enter the picture.
 Interesting if lacking in structure July 17, 2010
obediah (Sydney, Australia)
1 out of 1 found this review helpful
This book is an effort to dispel the myth of homo economicus, the hypothetical creature that always acts rationally to maximise utility. The book is an overarching review of behavioral finance, the body of economic research that proposes hypotheses based on actual experiments rather than theoretical models. Overall I found the book quite comprehensive and reasonably well written.
However there is no disguising the fact that it is basically a collection of academic paper reviews. I found the structure to be slightly disjointed with the book lurching from topic to topic in a rather haphazard fashion. This is certainly recommended for those with an interest in finance and economics. For the general population the content may be a little dry and I would not consider this book as palatable as more popular works such as Freakonomics.
Entertaining read with many chapters July 10, 2010
H. T. Ma (NJ, USA)
There are quite a few behavior economics books published in the past few years such as Nudge by Thaler/Suntein and Irrationality books by Ariely. These are the scholars and researchers who came up with many of the ideas and experiments to expose human behavior. Author William Poundstone does not have the same in-depth academic knowledge as the other authors and cannot explain the experiments quite as well. However, he makes up by well researching the topics and the many business cases he compiles to support his point. In addition, he did a good job summarizing the origin and profiling the pioneers of this field. In early days, it seems everyone is connected.
The book is structured into four parts, "The more you ask for, the more you get", "Black is white with a bright ring around it", "Incoherence is more than skin-deep" and "Pricing is a dangerous lever". Even with the tag line, I wish the author explained the structure in an introductory section so the reader could better follow the book.
The book has 57 chapters. It certainly follows an interesting strategy. By having short chapters, the readers feel they are making good progress on the book. I especially enjoy reading the business cases in Part 4.
Overall, this is an entertaining book. You learn something about consumer behavior and how business takes advantage of such behavior.
Did I pay a fair price for this book? May 24, 2010
Alan D. Friedman (SF Bay area)
1 out of 2 found this review helpful
Yes,but I did get this from the library. This book confirmed my unease that I, and apparently most other people, really cannot clearly establish what anything should cost. It is bad enough at the supermarket (are organic or free trade items really worth that much more?) but even worse with larger items bought less frequently (airline flights, appliances). And for once in a lifetime events - a jury deliberating on a major civil lawsuit, forget it.
The author pulls out many fascinating nuggets behind the art and science of assigning pricing, and how psychology, and those who understand and harness it, can mislead the consumer.
My only fault with this book is that it consists of 50-60 somewhat unconnected chapters. Condensation and editing of the material would raise its price.
Showing reviews 1-5 of 22
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