Read Priceless: The Myth of Fair Value (and How to Take Advantage of It) by William Poundstone Online


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 costPrada 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....

Title : Priceless: The Myth of Fair Value (and How to Take Advantage of It)
Author :
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ISBN : 9780809094691
Format Type : Hardcover
Number of Pages : 336 Pages
Status : Available For Download
Last checked : 21 Minutes ago!

Priceless: The Myth of Fair Value (and How to Take Advantage of It) Reviews

  • David
    2019-02-15 12:19

    This book's big idea: Normal people under average contemporary circumstances can consistently be hoodwinked into making decisions against their own economic interest.Define “normal people” as anyone with an average attention span and average load of worries, cares, responsibilities, and distractions.Define “average contemporary circumstances” as the usual places and times when people are compelled to spend money, e.g., in crowded and noisy stores or markets, under the influence of salespeople on commission, or through websites designed in a deliberately manipulative manner.Given the above, few people can do calculations in their heads with, at most, three or four variables. Most will struggle with two variables. A consulting industry, presumably populated by grown-ups with the same moral character as single-cell organisms, has grown up around exploiting this weakness in the human character. The result is the proliferation of unnecessarily complicated pricing systems and commercial gimmicks, including but not limited to customer loyalty programs, rebates, and cell phone contracts of Byzantine complexity. Faced with this, customers (also occasionally called in the book, I am not making this up, “suckers”) can then be distracted by a single high or low number, which the confused brain will seize on as the basis for a (bad) decision. When younger, I was considered something of an extremist because I voiced the opinion that, if people who knowingly aided in the economic exploitation of other members of their society were publicly garrotted at half-time during the Super Bowl, and their corpses hung from the goalposts while birds pecked out their eyes, it might cut down on the number of people who participated in such exploitation, thus benefitting society. However, I have mellowed and become more conservative, a result of old age (certainly) and wisdom (perhaps). I now believe that people deserve an opportunity to reconsider the error of their ways. So perhaps all that needs to be done is to put exploiters in the stocks and pelt them with old fruits and vegetables, to let them know that their activities are not universally approved-of. Strangely, this comparatively-reasonable opinion, when voiced, still makes people move away from me at social gatherings.But I digress.In summary, this book is a readable popular summary of the disciplined and painstaking research which shows that, while crowds might have some wisdom, the individuals and small groups that make most economic decisions have very little. Interviews with the author about this book on National Public Radio's "The Splendid Table" here and on "Marketplace" here.

  • Jamie
    2019-01-19 15:36

    I've always been interested in the psychology of consumerism, along with related topics like marketing and purchasing behaviors. Both for how shameless it is and how readily we (myself included) seem to fall for what really amount to simple psychological slight of hand. Priceless: The Myth of Fair Value (And How to Take Advantage of It) by William Poundstone looked like it was going to scratch that itch, and while it does to some extent I'm left a little off balance by the book.If you look at Priceless as a whole, it seems to hit a lot of the right notes for me. It takes practical questions like why we buy what we do and why marketers do what they do, and it answers them by turning to theories and well established phenomenon from psychology --most notably Amos Tversky and Daniel Kahneman's prospect theory. There's chapters on how menu consultants use psychological anchoring and the contrast effect to get you to order what they want, an examination of the effectiveness of prices ending in ".99" and other such "charm" numbers, the allure of all-you-can-eat buffets, the power of breaking out many small benefits in a sales pitch (i.e., the "But wait! There's more!" trope), and other such fascinating topics. And overall I'd say it's a good read for all that.The main thing that keeps me from whole heartedly recommending Priceless to any reader, though, is that none of that good stuff really starts until page 143 out of about 290. The entire front HALF of the book focuses less on the specifics I listed above and more on the general case of prospect theory and its history. In places it reads more like a mini-biography of Kahneman and Tversky as well as some of their predecessors. And when he's not doing this "history of science" thing, Poundstone is going into some pretty gnarly specifics on the science (both from psychology and economics) of all this. Now personally, I loved all this and ate it up because while I knew most of it I was interested to get some biographical information and see it all in a different context. It's just kind of hard to recommend to someone who's walking into the topic without any other education.And while the book does turn the corner halfway through when it starts getting into some practical and fascinating specifics, those chapters do assume that you've read and understood most of the stuff in the earlier, technical parts. The discussion of our preference for all-expenses-included vacation resorts, for example, assumes that you grokked an earlier discussion about the convex nature of the value function to the left of an individual's reference point. Or somesuch.It's an interesting way to structure the book, as opposed to the typical approach of tackling one topic (say menu design or the fallibility of real estate agents) and then presenting all the related research in one chapter. One advantage to the approach in Priceless is that the latter, topical chapters are all really short, averaging just 3 or 4 pages each. I think this will make it a pretty good reference book and I enjoyed it overall, but any recommendation has to come with the caveot that you should know what you're in for.

  • Mohammad
    2019-02-10 17:38

    اگه همین الان قرار باشه یک بسته نمک رو ارزش‌گذاری کنین، آیا رقم هزار تومن خوبه یا نه؟ آیا قیمت یک بسته نمک خوراکی باید بالاتر یا پایین‌تر از هزار تومن باشه؟ نمک کالاییه که به کررات خریداری نمی‌شه. یعنی هر روز یا هر هفته نمی‌خریمش. این خودش یکی از عواملیه که باعث می‌شه تعیین قیمتش برای ما سخت باشه. البته عوامل دیگه‌ای هم دخیله. مثلا اینکه این جنس توی سبد کالای ما بخش ناچیزیه. در نتیجه بالا یا پایین رفتن قیمتش برای ما مهم نیست (کشش قیمتی). ولی اگه نمک فروش باشین و قیمت هر بسته رو کمی بالا یا پایین کنین، تفاوت تاثیرگذاری رو می‌بینین؛ ممکنه ورشکست بشین یا حاشیه سودتون چند برابر بشه.موضوع این کتاب در مورد قیمت و انعطاف‌پذیر بودن ادراک ما از قیمت‌هاست. اصولا ما نمی‌دونیم قیمت کالاها و خدمات چقدره و برای به دست آوردن قیمتی که حس کنیم عادلانه و مناسب باشه باید کالا یا خدمت مورد نظر رو با کالاها و خدمات مشابه یا جایگزین یا قیمت اونها در گذشته و یا اصلا یک معیار بی‌ربط دیگه مقایسه کنیم. به بیان دیگه، ارزبابی نسبی ما از چیزها تقریبا هماهنگ و ثابته، اما رقم ریالی این ارزش‌گذاری معمولا خیلی متفاوته. قیمت مطلق وجود نداره و همه چیز نسبیه. منتها ممکنه این نسبی بودن توی شرایط مختلف به گونه متفاوتی به سود یا به ضرر ما باشه. فروشنده‌ها و خریدارها چطور می‌تونن شرایطی ایجاد کنن که از این نسبی بودن بهره‌برداری کنن و بیشترین سود و کمترین ضرر رو ببینن.وقتی قرار باشه یک کالا یا خدمتی که تا حالا باهاش سرو کار نداشتیم رو ارزش‌گذاری کنیم، به دنبال نشانه‌هایی می‌گردیم که بتونیم ازش کمک بگیریم. اینجا عواملی می‌تونن روی ادراک ما تاثیرگذار باشن که الزاما ربطی به ارزش خود اون چیز نداشته باشه. یکی از این عوامل چیزیه که بهش می‌گیم «تکیه‌گاه». مثلا رقم هزار تومن که برای بسته نمک مطرح شد، دقیقا همین نقش رو داره؛ یک رقم پیشنهادی که شما برای ارزیابی اولیه بهش فکر می‌کنین. این رقم کاملا حدسی بود و از خودم درآوردم. من هم نمی‌دونم یک بسته نمک چند تومنه. منتها توی ارزیابی ما معمولا این طور ارقام مبنا واقع می‌شن و بر اساس گروون بودن یا ارزون بودن نمک توی ذهن ما، ارزیابی خودمون رو یک مقدار اصلاح می‌کنیم. مثلا اگه گفته بودم آیا پونزده هزار تومن برای یک بسته نمک خوبه یا نه، تقریبا همه می‌دونستن که زیاده. اما اگه بعدش می‌پرسیدم چند تومن مناسبه، اون وقت رقمی که فرد پیشنهاد می‌کرد خیلی بالاتر از قیمتی می‌بود که توی مورد هزار تومن ارزیابی می‌کرده بود(ویگولنزجگ). این مورد به کررات توی جاهای مختلف آزمایش شده و به اثبات رسیده.این موضوع برای خیلی از مشاغل اهمیت داره. مثلا برندهای پوشاک لوکس معمولا اجناسی دارن که خیلی گرونه. یک کیف دستی زنانه از خز پلنگ می‌تونه تا هفتاد هزار دلار قیمت داشته باشه. یک ساعت مچی طلا با تزئین الماس سیاه رو تا یک میلیون دلار هم قیمت گذاشتن. منتها معمولا این طور اجناس به فروش نمی‌رن. یعنی تولیدکننده از اول می‌دونه که قرار نیست این جنس رو بفروشه. چند دونه ازش تولید می کنن و با دکوراسیون تجملی و تشریفاتی می ذارنشون توی فروشگاه های مراکز بزرگ و اصلی و البته براش تبلیغ می‌کنن. منتها عموم مردم این چیزها رو نمی‌خرن، اگه هم بخرن که چه بهتر. اونها دوست دارن منزلت اجتماعی ناشی از این برند رو داشته باشن اما هزینه گزاف این کالا رو نپردازن. وقتی می‌رن به فروشگاه‌های این برندها، خرید یک کیف زنانه از چرم شترمرغ به قیمت سه هزار دلار در برابر اون کیف پوست پلنگی خیلی منطقی‌تر به نظر می‌رسه. یا یک ساعت بیست هزار دلاری از همون برند منتها از مدل دیگه. اون تکیه‌گاه باعث می‌شه قیمت جنسی که فروشنده از اول به دنبال فروشش بوده مناسب جلوه کنه. با این کار استاندارد قیمت‌ها توی ذهن خریدار بالاتر می‌ره.علاوه بر این، عوامل دیگه‌ای هم برای مناسب جلوه دادن قیمت وجود داره. با توجه به اینکه اینترنت دسترسی ما رو به اطلاعات ساده کرده، در نتیجه برای فروشنده‌ها مهمه روش‌هایی رو به کار بگیرن که مقایسه قیمت‌ها و تعیین معیار قیمت به عنوان عامل تعیین کننده مطرح نشه تا بتونن سود کنن.در نهایت اینکه ضرب‌المثل «هر چقدر پول بدی، همون قدر آش می‌خوری» الزاما درست نیست. ممکنه آش کمتر و با کیفیت‌تر گرون‌تری بخوری، ممکنه آش گرون اما معمولی ولی پخته شده توسط آشپز معروف‌تر یا رستوران تشریفاتی‌تری رو بخوری، ممکنه آش بیشتر و ارزون‌تری بخوری، شاید آش بی‌کیفیت گرون رو به این دلیل بخوری که رستوران توی ایستگاه کوهپیمایی واقع شده و گزینه دیگه‌ای نداری، ممکنه به دلیل نذری بودن یا کمک به خیریه یا عوامل دیگه آش‌هایی با قیمت‌های خیلی بالا یا خیلی پایین و حتا رایگان بخوری. قیمت آش مطلق نیست.در کنار اینها، درک ما از عادلانه بود قیمت، ریسک، سود، ضرر، احتمال و موارد دیگه هم توی کتاب مطرح شدن. که با مطرح کردن آزمایش‌ها و نظرسنجی‌های مختلف مستند شده بودن.ـــــــــــــــــــــــــــــــــــــــــیک سری مشکلاتی توی این آزمایش‌های رفتارشناسی و جامعه‌شناسی وجود داره که بنیادی‌ان. اینکه چرایی رفتار آدمیزاد رو تا حد زیادی نمی‌دونیم. یعنی تا حدی اصلا نمی‌تونیم بدونیم. حتا وقتی خودشون دلیلی برای انجام کارشون داشته باشن ممکنه الزاما اون چیزی نباشه که بیان می‌کنن. عواملی که تاثیرگذارن اونقدر زیادن که منتسب کردن یک رفتار به یک علت کار پر از تردید و شکه.شاید یکم بیش از حد روی موضوع «تکیه‌گاه» و روش‌های به کار گیریش متمرکز شده بود. تقریبا همه کتاب حول همین محور می‌چرخید. اما در کل خوب بود.

  • Julie
    2019-01-22 18:32

    Oscar Wilde once said, "The cynic knows the price of everything and the value of nothing." William Poundstone might argue that the average person doesn't know the price of anything, either. Or, rather, that prices are arbitrary constructions that aren't really based on value at all.Priceless is a foray into behavioral economics and social psychology as they apply to price and money. A lot of the research Poundstone brings forward I knew about already, and giants in the field (such as Tversky, Kaneman, and Ariely) are amply represented. But really, Priceless is a walk through our own minds and how we come up with the price we're willing to pay for things, especially when we have no reference points.Taken together, the results of all this research could be disheartening. They show that people are easily manipulated by "anchors" (i.e. a reference number, which may be completely random), even while insisting that anchors have no effect on them. People will pay more for a steak dinner (or anything else, really) if there's a super-expensive option presented that no one buys. Just having the super-expensive $150 steak on the menu makes your $50 plate of chicken seem far more reasonable a purchase. And on and on. Why did the jury award $2.9 to Stella Liebeck in the infamous "I spilled coffee on my lap" case against McDonalds? Because her lawyer suggested that the jury award punitive damages equal to "one or two days of the company's worldwide coffee sales." This is completely arbitrary (why worldwide? why coffee sales? why a day or two?), but it framed the question and led to a the multi-million dollar fine. Priceless demonstrates that people pay astronomical prices for things they don't want. They'll claim one deal is better and yet consistently chose another. Their interactions with strangers change when there are other people looking, or even just a picture of eyes. Their preferences change drastically when even a small amount of uncertainty (1%) is introduced. Or when they're presented with something "free." And, through everything, they'll continue to insist that these criteria have absolutely no effect on them.It's a fascinating read and worth it to know (and attempt to counter) your internal biases. Recommended.

  • Chad Post
    2019-02-14 16:25

    Excellent summary of a ton of behavioral economics findings. Probably the best book in this vein that I've read, in part because Poundstone doesn't write like he has anything personal at stake--he's just sharing all this interesting info. In part because Poundstone's examples (almost every chapter opens with an anecdote or a portrait of an interesting figure) are so damn good.The first half of the book lays out a few crucial concepts--anchoring, price coherence, etc., and the second spells these out through a series of fascinating experiments and situations. Must read for anyone studying pricing or in business school or at all interested in decision making . . .

  • Jenny
    2019-01-25 16:14

    I would give this book 3.5 stars, not because of his writing style, but my personal preferences. Definitely some great stuff on economics and behavior psychology, but too dense on the descriptions of each and every study done over the years. I would prefer just to have the main takeaways of each. You can read a book summary of this one at Actionable Books:

  • Unwisely
    2019-02-02 13:39

    I remembered William Poundstone from the Big Secrets era. So when a goodreads friend mentioned this book, I thought I'd check it out.It was both maddening and interesting. Basically, prices are meaningless; supply and demand is irrelevant to cost; and your cell phone bill is complicated on purpose. That's not much of an enticement to read it, but it discusses economic and neuroscience research in short, digestible bites. (With depressing results, but you probably already knew something was amiss, didn't you?) Of course, I was depressed, but when I told a normally-chill coworker with an MBA that prices were meaningless, he got actually angry. So that was interesting...

  • Adam Wiggins
    2019-02-13 17:13

    A look at the psychology of how people perceive product prices. Some interesting tidbits: for example, that cereal manufacturers raise their prices by changing the size of the box and/or the amount of empty space inside; and after a trend of increasing or decreasing size has gone on for a while, then offering a new "value size" or "mini size" that returns to the original dimensions, but with a seeming justification for the price change.But overall, it spent a lot of time on studies and ideas that I was already familiar with (for example, anchoring) and personal profiles of the economists or psychologists involved in developing them, so I didn't find it very rewarding.Stopped on page 86 of 336.

  • Uwe Hook
    2019-02-03 13:15

    We are primates. Not homo economicus, as we pretend to be.This is not a text book, more of an entertaining book spinning stories how marketers, scientists and companies exploit our weak mind each and every day. We're so easily fooled, it's mind-numbing. We all have our biases and prejudices in all areas of life, and PRICELESS helps to explain how and why we may feel in a certain way about the price of Gucci bag, a pair of Jimmy Choos, and etc. The evidence provided is primarily anecdotal and not meant to be an all encompassing erudite study in economics. If you want to read a very entertaining book on how many large marketers decide to set what they consider to be their optimal prices for their various products then add this book to your reading list.

  • Дмитро Булах
    2019-01-22 14:30

    'Priceless' is neither an extensive theory of value perception nor even a marketers' guide to 'right' pricing but it's still a great book. It starts with a review of history of modern behavioral economics and then goes into recent studies of price perceptions. That in turn leads us to notion of multidimensional, culturally and personally conditioned price perceptions. That would definitely challenge your common sense view of how money and mind collaborate.Especially recommended for D.Kahneman fans.

  • Greg
    2019-02-06 12:33

    Couldn't get too into this one. I wish it hadn't been written as 40-odd short chapters and more of a continuous narrative. I also wish I had a unicorn.

  • Jeremy Dooley
    2019-02-11 14:20

    Good book. Many profitable insights. Some areas were a bit dense, but the latter half was very applicable.

  • Sid1983
    2019-01-31 15:14

    on ONPrices, anchoring & other price related heuristics Buyers are mainly sensitive to relative differences, not absolute prices ==> relative valuations are stable and constant while absolute price levels can be wildly arbitrary Price is context dependent — that’s why anchoring is a thing In fact, anchoring happens subconsciously and even if warned about it, subjects seem to adjust insufficiently for it Can you then really push the envelope and come up with a crazy anchor? Old theory suggested a boomerang effect in that doing so would have the opposite effect and the seller would come in lower -- not true, but it is the case for diminishing returns When it comes to anchoring, recency matters -- so a 5oz weight feels heavier just after you have held a 3oz weight Frequency too matters, if you're used to weighing a 3oz weight, 5oz will feel enormous The counter that mitigates it somewhat is to consider the opposite. That’s why it helps someone by your side to ask you the counter arguments Other heuristics Wealth effect is when extra income has diminishing utility the wealthier your are … as Arnie put it, his first million made him happier than his fifth People tend to pay more attention to the size of the prize, rather than the odds -- explains why lotteries are popular For instance, in the chart below, people prefer A but assign a higher value to B even though the expected value is the same Then there's the endowment effect wherein people ask for more when they have to sell vs. what they would offer had they needed to buy -- in other words, we don't like giving up stuff Another heuristic is the law of small numbers wherein people think that what holds for large data sets, will come true of a fewer number of observations e.g. we know in a large number of flips, odds of H/T of a coin is 50/50...but it's wrong to think that holds of say, 10 flips Then you have availability bias wherein we seek information that supports our pre-held notions Prospect theory, favorite of mine, has a few implications ○ Relativistic nature of gains and losses: your utility over a win/loss depends on the level of wealth you have become attuned to e.g. rich aunt bequeaths $1,000 to everyone but $25 to you, you're likely to feel you lost $975 vs. gained $25 ○ Loss aversion: loss hurts more than the same gain ○ Certainty effect that there is a chasm between the certain and the merely probable Ambience matters -- you wouldn't shell our $x for a beer if it were in a dive bar, but perhaps would were it in a fancy hotel. That can play out within categories too -- for instance, Bud was priced cheaper than Michelob and yet Michelob prices went up too as people considered it the "better" beer and paid up for it. And then there were people who were drinking cheaper and went up to Bud on the halo effect. So put an expensive item next to an even more expensive one, and people will find a way to justify the purchase.. Cute anecdote -- illustrates that a restaurant shouldn't list prices in a column Money illusion -- when prices are stable, people behave as though purchasing power and money are one and the same -- What causes? It's too much effort to do the math Wealth effect Shows up in many ways -- people even pay to use words that suggest lower risk In terms of product pricing, the mantra is don’t raise prices, lower the discount Other chapters touch on the beauty effect, the gender gap which also got men to accept higher rates by attaching photos of women vs men on loan brochures Married men have lower testosterone than single men and it also manifests in a shorter ring finger relative to the index Memories are short -- in a game involving inflation, asset bubbles were created by exuberant participants looking for the bigger fool -- in subsequent versions, they were more prudent and crashes were milder. Problem is that in real life, memories are short News can inflate values -- Hirst put out the diamond skull for a record price, sold eventually to an unnamed bidder -- turned out it was him and the gallery owner, but never mind that, before then they had released 23 of his works that sold for a tidy sum -- halo effect Wisdom of crowds works when individuals make intendent judgements, otherwise there's a tendency to go along with the crowd When people are more self aware, like a honesty test but in a room with a mirror, they tend to be more honestHuman behavior affecting perception of value Supply & demand too are challenged by human behavior. For instance, hiking shovel prices after a storm is deemed unfair, as are auctioning off the last hot toy in the store for Christmas -- cardinal rule seems to be don't increase profits at the expense of customers Next, you have ultimatum games wherein you propose a split and the other person can veto and no one gets anything These can be influenced by the presence of an observer. For instance, people tend to keep more for themselves if their generosity or miserliness is anonymized Another behavioral quirk is that you can get people to pay more than they want to in an attempt on their part to get the lowest price e.g. eat the 72oz steak in an hour and it's free, else you pay $72 (which is over market price) Why is that the case? An MRI shows that unfair offers trigger the insula cortex which is triggered by paid -- that's the rejection part to free money Another quirk is that people prefer to get many small bonuses vs. one lump sum while for bad news, it's the converse -- so we prefer one $90 ticket over 3 $30 tickets People tend to overestimate their usage of various services -- bundling then helps because they will pay for it, but won't use it Similarly, about 40% of rebates go uncollected but the offer of a rebate does increase sales than without Charm prices work too i.e. $29.99 instead of $30 Why? Perhaps because people go, it's a two-handle vs. a three-handle Works even better when it highlights that the item has been discountedPeople's idea of what the cost should be is influenced by

  • Suhrob
    2019-01-17 12:14

    Is it really wort 5*? Probably not.But.Priceless is just another book from a throng of multitudes of reams of heaping piles of tomes based on Kahneman & Tversky program (with significant additions from Thaler/Sunstein and Ariely et al. in this case) and subsequent research (not a negligible part of which is now in serious replication perils).So why 5*?1. Poundstone is just really good. 2. He doesn't think you are a complete idiot (not that this is some heavy stuff, but there are things that wouldn't fly in a standard pop-sci book). Thank you.3. There are some very interesting background stories especially from the pre-K&T era, that I haven't seen elsewhere.4. Focusing on the consumer (and price-setting) does bear some relevance to the everyday life.I was surprised how much I liked it actually. Recommended!

  • Douglas Martins Rodrigues
    2019-02-15 11:20

    O livro é um manual interessantíssimo de como funciona a psicologia dos preços. O autor explica com vários exemplos como em nossas cabeças fazemos atribuições de valores para as coisas de formas totalmente sem sentido (que fazem sentido apenas em nossas mentes). Preço é um ciência e certamente você alguma vez na vida foi influenciado por um preço âncora ou pagou por algo não só pelo produto, mas pela percepção de valor.Para mim o ponto forte do livro é a clareza da apresentação das ideais, inclusive muito bem ilustradas. Como ponto negativo, fica o fato do livro ser extremamente denso, às vezes cansativo e ao meu ver usando 3 ou 4 exemplos para explicar algo perceptível de primeira. Muito boa leitura.

  • YHC
    2019-02-08 18:28

    Consumers are often blinded by the price/ number, ignoring the true value of the product they paid. Moreover, discount price tags with the comparison of original price play a successful trick to push consumers to buy impulsively. I am already immune of consumer impulse for long time, i only buy what I need not what i desire. This book used many interesting terms for me to understand more of consumer behaviors with many examples which are good for those who want to get out of the tricks to learn.

  • Roberto Suarez
    2019-02-10 16:40

    ReveladorUn libro que demuestra toda la psicología q hay detrás de los precios, los valores, las ofertas, promociones y demás aspectos de nuestra vida diaria en relación al consumo, el capitalismo y la felicidad

  • James
    2019-01-19 16:38

    This book offers clear information on how to price your goods and services. The secret is in the psychology of value, which the author does a great job of presenting. Any business owner will be well served by reading this book.

  • Michael Heath-Caldwell
    2019-01-27 15:42

    Very informative book on one of the basics of society, the pricing structure of the financial sector and how ad hoc it is and how easily it can be manipulated.

  • Victoria Zabuzova
    2019-02-10 18:16

    Arguably fresh recount of cognitive biases

  • Graham Herrli
    2019-01-22 14:23

    The overarching message of this book is that monetary valuations are rather arbitrary. People don't really know how much things are worth. Even though we generally agree on relative ratings between things on such scales as enjoyability or unpleasantless, we are inconsistent in translating these into monetary amounts. In negotiations, the more you ask for, the more you get. Whichever amount is named first skews the whole future negotiation. Poundstone begins with a look at psychophysics—how we perceive stimuli of varying intensities. He explains that most things we perceive follow a power rule, meaning that doubling the intensity of the stimulus increases its perceived intensity by a set factor, regardless of the intensity of the stimulus. The factor is different for different stimuli: for money, the focus of the book, it's about two. (To double the pleasure of unexpected money, four times the money must be received (p. 43).)The middle section of the book is about Prospect Theory, Tversky and Kahneman's ideas about the importance of reference points, loss aversion, and certainty upon decision making. Poundstone reveals a historic divide between scholarship in economics and psychology, and shows how prospect theory is helping to reconcile the two.To demonstrate the implications of prospect theory, Poundstone considers many variations on the "ultimatum game" (where one person offers a way of dividing some money and the other person must either accept the offer or decide that neither person gets any money). These variations demonstrate aspects of monetary negotiations with regards to race and gender as well as various social primes.Some of the book's more interesting details are:(view spoiler)[ * The more money a plaintiff asks for, the more she is likely to get. There doesn't appear to be a point where the jury decides that a request is so unreasonably large as to create a boomerang effect upon their estimate. No matter how much the amount requested is increased, the amount awarded only increases as well (18). Asking for a larger award can also increase the presumed likelihood of the defendant's guilt (19). * People tend to place higher value on bets with larger possible sums to win but to prefer bets with a larger probability of winning, leading to an inconsistency between their preference and the price they're willing to pay (63-6). * People judge it acceptable for a troubled company to skip bonuses for a year but not for a company to cut an equal percentage of wages (107). * People in the US spend more when they shop in a counterclockwise direction (149-50). * People are willing to pay more for the same drink when that drink is ordered out from a fancy resort than if it's ordered out from a run-down grocery, even though they don't go to the physical location in either case (150). * People prefer gains divided into several smaller gains (169-71) but prefer losses lumped together (174) because the pleasure or unhappiness from individual things is larger than from the aggregate of those things. * Batteries being labeled with voltage is like if gas were labeled with an octane rating but without telling you how many gallons you bought (179). * The perceived value of things scales almost linearly with the advertised reference price, even when that ARP is up to 2.8 times the normal market value (204-5). In other words, label something as selling for $10 marked down from $28 (at some other store or other time) and people will think that it actually is worth $28. Real estate agents will use this trick so that they can make houses appear "discounted" after an unrealistically high initial listing (205). * People tend to ignore inflation, treating a higher price in the current day as a gain in value rather than just an increase in price (225-8). * Stock market bubbles occur after inflation because people get used to prices rising and assume that they will continue to rise (264-5). * Money is overweighted in decision making, possibly because it is a number, and numbers are easily compared (287). (hide spoiler)]

  • Ilya
    2019-02-09 15:39

    Neoclassical economics says that given fixed costs to produce them, in a free market the prices of goods and services are determined by the demand for them, which is determined by their marginal utility to the consumers. This is as meaningful as saying that the demand for food is determined by its marginal nutritional content. Yes, people want to eat food and not non-food, though in a hungry year peasants can eat plant parts that are not usually considered food, but the mental mechanisms to determine the nutritional content of food are imperfect, and a whole industry (the junk food industry) has sprung up to exploit its bugs. Likewise, the mental mechanism to decide how much something is worth to oneself, and whether its price exceeds this worth, is imperfect, a whole branch of marketing has sprung up to exploit its bugs, and a whole branch of economics called behavioral economics has sprung up to explore them.It is much easier to tell whether an object is heavier than, is lighter than, or has the same weight as another object than it is to name the weight of an object in pounds. Likewise, it is much easier for a consumer to tell whether a good or a service should be more expensive than, cheaper than, or have the same price as another than it is to name its fair price. How much should something cost? What it used to cost before; if there is inflation, and the can of peanut butter can no longer be profitably sold at the old price, then perhaps it should have a concave bottom instead of a flat one, so its nominal price doesn't change even though it contains less butter. After a while this doesn't work, so this brand should be discontinued, and a different one launched. What other similar products cost; an SMS is like a phone call, so it also costs the consumer a few cents apiece, even though it costs the provider company something like 1/1000 of a cent. If there is a more expensive premium and a less expensive regular version of the product, many consumers will eagerly buy the regular version thinking themselves smart, even though this is exactly what the seller expects them to do. The hundred-thousand-dollar watch may not sell a single copy, but it will sell many of the same manufacturer's ten-thousand-dollar watches. The author quotes a psychologist to the effect that this trick goes back to the seventeenth century: a merchant would sell one thing to a king, and something lesser to every courtier (I immediately thought of the Necklace Affair in pre-Revolutionary France). The same consideration applies to the same product across time: if consumers are told that something is being sold at a great discount from the regular price, they will buy it, even if the regular price is something no one ever pays. The same logic applies to the question "How much should someone be paid?" If someone finds out that another person in the same occupation makes more money, he will want at least as much, even if the extra pay will not make him appreciably happier. This can create a positive feedback loop for the salaries of TV stars and corporate CEOs, whose employers can afford to pay them millions.Even in a free market, false advertising is illegal. Yet there is a fine line between lying and psychological manipulation. Though it is much harder to define, I would prefer that messing with the consumers' heads be as illegal as telling them outright untruths.

  • David Dinaburg
    2019-01-19 15:27

    A great weight descends upon Pricless: The Myth of Fair Value (and How to Take Advantage of It) from the very beginning. The recurring scheme of positioning a non-fiction book as a treatise on insider tricks—a practical guide to self-help, fulfilling the promises of personal actualization—is the sole misstep in an otherwise delightful experience. Truncating the title, leaving it Priceless: The Myth of Fair Value is an apt signifier; (and How to Take Advantage of It) is one step removed from “Pricing Structures THEY Don’t Want You To Know.” There is a fair bit of a direct information: Say you’ve got a $100 product. You don’t sell it for $100, goodness no. It’s $149 discounted to $99. As time goes by, inflation nibbles at your product and you have to raise the price. Don’t raise the price—lower the discount. The official price, which nobody pays, remains $149. But now you discount it to $119. For a lot of things, like newsletter subscriptions, many customers won’t notice. They won’t remember the old price, and they haven’t a clue what the product should be selling for. Instead, they’ll fall for the lure of getting a $149 product for “only” $119. More time passes, and inflation never sleeps. You tell your customers that, in view of increased costs, it will be necessary to raise prices, from $149 to $179. But for selected customers (meaning basically everyone), you’re increasing the discount so that they pay not a penny more than they did before, $119. Nobody can object to this. The price remains the same. This lays the groundwork for the next ratchet upward. Much of Priceless is filled with these technical vignettes, launched with such alacrity that the entire experience resembles nothing so much as befriending an economist while on vacation; the colloquial tone belies the technicality and the storyteller’s brevity carries throughout all fifty seven snappy chapters. Priceless commands the air of Mai Tais and Aloha shirts: “A three-martini lunch converts complex problems into deceptively simple ones.” In other words, hang loose, friend, we’ll figure this out together.There is a constant lure of self-awareness in the latter half as you are confronted with phrasing that places the reader into the role of the experimental subject. “You have a choice of two equally fine chocolates. One is small and shaped like a heart. The other is big and shaped like a cockroach. Which do you prefer?” It’s a shortcut to engagement, a cheap and easy way to personalize a subject that is often seem as byzantine; those should interpreted as lauds, not pejoratives. “Christopher Hsee has posed this dilemma to students and friends, finding that most choose the cockroach chocolate.” There is no dryness or tedium to toil through; the background historicity of the first half informs a better understanding of the contemporary practicality in the second. “The kicker is that when Hsee asks people which chocolate they would enjoy more, most admit it’s the smaller one, shaped like a heart.”

  • Julian Karas
    2019-02-05 15:40

    I had always assumed that pricing was strictly a function of economics. Perhaps that's why I found myself shaking my head at so many of the different pricing traps that William Poundstone has described in this book. Not only has he shown that pricing is heavily based on psychology, but he has given an excellent overview of how these patterns of consumer behaviour have become general principles.In the aftermath of the depression and the second world war, the economics profession was in need of a way to solidfy the quantitative models they were developing, as a way of avoiding more crashes. But these models were all based on "utility" - that there is a rational predictable pattern of buyer and seller behaviour . There tended to be a lot of armchair-style assumptions made about the way consumers make decisions. It was then that psychologists began testing some of these assumptions, and made the discovery that people's choices are often totally irrational, based on distorted perceptions of probability, ingrained biases, over-reliance on the very vague concept of "fairness", and a whole raft of other foibles. People like Herbert Simon, Amos Tversky, Maurice Allais, Daniel Kahneman, Richard Thaler, Sarah Lichtenstein and many others worked through the 60s and 70s to quantify and explain this irrationality, to the point that it is now an established part of the economic literature.There is a multitude of fascinating examples of this throughout the book. One general concept that underlies it all , is the idea that we are very poor at judging the absolute magnitude of something in the absence of a reference; but very good at making relative comparisons upon which we can quickly make buying decisions. This is the concept of the "anchor" value as an initial reference, and it was instrumental in some of the big consumer lawsuits, like the McDonald's coffee case. It's a key concept in bargaining. This is what businesses use to boost sales. I had no idea that there were such people as "menu consultants", but these guys have almost scientific methods of crafting a restaurant menu to maximize revenues, and they have the sales figures to prove it.That's aside from all the other psychological tools at the disposal of businesses now, who can comfortably rely on the inability or unwillingness of most people to navigate through the welter of different options, billing systems, consumer ratings etc. Rarely is anyone getting ripped off, but businesses gently guide the interaction to the desired conclusion using all these systems.The knowledge in this book is not only incredibly interesting in a general sense, but also potentially has a lot of practical value. I hope to apply some of this knowledge to strengthen my own decision-making and bargaining abilities. I am also determined to track down more books by William Poundstone, Kahneman, and Tversky, etc. These guys have thought through a lot of things that I was utterly clueless about, and it would be great to discover what other "blind-spots" I've had through the years!

  • Greg
    2019-01-18 13:18

    Probably worth buying to refer back to. First half is boring and dry. Rehashes Ultimatum and Dictator experiments ad nauseum. The last part of book is great though. Talks about real-life examples of pricing, and how to decipher the different pricing tricks used. Pricing is all relative, and in many cases is completely independent of any "market". - One common trick is to put something insanely expensive as the flagship product and emphasize that. Jewelry stores, high fashion stores and restaurants all do this. Then, place a less expensive item near it; people will think it's reasonably priced and buy that instead, even though compared to the market at large it's still way overpriced. - People choose what appears to be the most reasonably priced item. Lacking the appropriate context, this usually means buying the item priced slightly lower than the most expensive item, especially if it's marketed as a premium product. People avoid the most expensive product to avoid overpaying, but they also avoid cheap stuff, because of the perception of low quality. Therefore, the product priced a little less than the most expensive one wins- Fake sales prices are very effective, because people believe they're getting more for less. If two products are about the same in all aspects, one is priced at $29.99, and the other is sold as regularly $34.99 but on sale for $29.99, people will buy the second item. This also gives a cushion to raise prices in the future, as you're just "reducing the sales price", rather than increasing the price. - Money illusion (insensitivity to inflation) is very real. People prefer perceived increases in wages (3% raise, but with 2% increase in inflation) than real increases (0% raise, but -2% inflation)- Something about ending in 99 really appeals to us. If you price the same item to different people at $40.00, $39.99 and $34.99, dropping the price to $39.99 results in a sales increase (in terms of units) greater than dropping the price to $34.99 (or was it $30?).

  • Anthoney
    2019-02-16 15:24

    It’s one of the most useful books I have readIt so eruditely talks about the psychology about price, pricing and value. What I like about Poundstone’s writing is that he confines each theme into chapters spanning an average of 2 to 3 pages only. And like a couple of books of his I have read, it’s ideas and explanations pivot around one central theory, in this case theories on price and value researched by psychologists Daniel Kahneman & Amos Tversky, ‘psychophysics’ & quite a few theories derived from the Ultimatum games and its versions. The Ultimatum game is “claimed to be one of the most frequently performed of all human experiments today”. Simple experiments which leads to lot of implications to understand psychology behind price and value. “You are given 10 pounds to split with a stranger, and you get to propose how the money is divided – for example, 6 pounds for me and 4 pounds for the other person. The twist is that the other person gets to decide whether to accept you split or reject it. Provided he accepts, the money is split exactly as you specify. Should he reject the split, neither of you gets a penny. As the game’s name indicates, this is a ‘take it or leave it’ deal with no counter offers.”The stories and ideas nicely are nicely sieved through economics, marketing and pricing strategies, psychology. It felt a little unbalanced and leaning on these central themes of. Since psychology and value judgement can be so ambiguous, I was hoping for an equally balanced narration of the counterpoints to those ideas propound here, not leading one to assume that these are the final truths. Not that Poundstone suggests them to be the final truth, just that one could get finer understandings of their shortcomings or gaps, especially as this books also serves to be a ‘How to” as well. In spite of those small misgivings, the books still prevails.I can easily say that this book is now ‘valuable’ to me

  • Res
    2019-01-21 13:32

    Nonfiction, about the intersection of psychology and economics.I was already having my doubts about this book -- it seemed awfully digressive and lacking in specifics -- but I flung it down abruptly on page 118. Here's why. The chapter is describing a game well-known to researchers in the psychology of economics, in which one player (called the "dictator") is given a sum of money and told to divide it with another player any way he/she wants. What interests the researcher is one of two things:- the fact that the dictator usually proposes a fairly even split rather than $9 for me and $1 for you- the fact that the second player will often walk away if he/she deems the split unfair, even though $1 handed to you by an economics student is $1 you didn't have when you left home this morning. Right -- I was already familiar with this game. But then I get to this:Elizabeth Hoffman ... suspected that dictators were being generous only because someone was watching. The experimenter is often the subject's teacher, someone who would be grading him [sic] for months to come. Is it worth a few dollars to have the professor know you're a greedy bastard?My jaw dropped. I've read all these pages without anyone mentioning that players are aware their actions are being observed by people with whom they have existing relationships?! Researchers never thought this might be significant? The author never thought this might be significant? I'm seriously kind of disillusioned about this. Are all those beloved experiments in human behavior that I find so interesting contaminated by stupidity like this? And of course it's not the author's fault -- he's not the one conducting and writing up the experiments without taking this into account -- but he made me read 118 pages without mentioning it, so to hell with him.

  • PoligirlReads
    2019-01-23 13:37

    Oh this was a fun one. Quick anecdote: I once had a relative respond when I told them about a clearance rack item with, "99 cents?! Why, I can get that cheaper at the dollar store!" And that, my friends, is why books like Priceless: the Myth of Fair Value, exist.If you have a background in the social sciences, this will feel a lot like visiting old friends. I don't think anyone can overemphasize the impact of Kahneman and Tversky, and I'm glad that Poundstone devotes a good portion of the book to their work. Lest anyone be put off by the notion that the book is simply amounts to slogging through retellings of influential journal articles, Poundstone writes in a way that's completely accessible to the lay reader, and quickly gets to the point of explaining why the concepts discussed matter in concrete terms. He's got a very personable writing style that makes me want to read his other books. The book is set up by giving examples of the research on behavioral economics followed by an example of it in action (why a given marketing technique works). By the time he gets to the Damien Hirst example, you can begin to predict the outcome. The discussion on gender and race was good. I like the mini-biographies on the players involved. I also like that one of the underlying messages is that no matter who you are, or how clever you think you are, anchoring happens, and it happens to everyone. There are a few times when he veers off-track, but start to finish, this was a great read.

  • Nilesh
    2019-01-24 15:34

    Priceless opened a whole new world to me, a world that was always right in front of my eyes. Behavioral study fields always have fascinating tales. Tales about our own behaviour that defy logic and tell us something weird about ourselves. But most books on the subject fail to go past the tagging of these phenomenon and mocking at our own irrationality. They spend inordinate time going after the classical theories. This is where Priceless has something different to offer.To be sure, the well-written book has the usual things one gets in other books: the name-dropping, jargonizing, experiments that reveal the counter-intuitive aspects of our behaviour etc. This all is interesting, important and entertaining. But, where the book really adds value is in connecting them with real life situation, and offering some unambiguous advises in dealing with real life situations. For instance, the author makes a remarkable point when he discusses the importance of stating the first number in a negotiation situation - quite opposite of what most of us like to do. The revelations on the display items in a luxury store (that are never intended for actual sale but to create the illusion of value for other items) are useful for any compulsive shoppers. Even the usual topics like anchoring and prospect theory are attached to practical examples. A book to be read multiple times over time to really imbibe all its important messages.

  • May-Ling
    2019-01-21 17:17

    i feel like this book enlightened my sensibilities about prices. it's funny, since part of my job responsibilities include pricing for stanford's reunion homecoming - i was even able to pick up some tidbits that could help in this arena. in general, i think this is a book for everyone, since we should all think critically about the types of purchases we make each day.this book is chock full of case studies that just blew my mind. our family's extremely logical about pricing and we mull over purchases a lot before shelling out the cash. this book reminds me that most of the world is not like this and for years, retailers and companies have been using psychological and economic evidence to confuse consumers and get them to spend money. i feel like an expert in anchoring and shocked about strategies in place from restaurant menus to homes that seduce people. plus, there are fun anecdotes from the beginning of the field and even stories about the deal or no deal game show. read it and become smarter about how you spend your money. or at least know when you're being persuaded to purchase a certain option. overall, the book taught me how we don't really know how to interpret price at all and that we draw conclusions on our past and other evidence around us to come upon the right numbers...