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

3.77 of 5 stars 3.77  ·  rating details  ·  845 ratings  ·  117 reviews
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
Hardcover, 336 pages
Published January 5th 2010 by Hill and Wang (first published 2010)
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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 a 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
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, Ka
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 Pr
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 amis
Uwe Hook
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
Adam Wiggins
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 tha
Chad Post
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
The author claims that we use heuristics like anchoring, availability, and representativeness in making purchases/setting prices; also, we react to changes in price rather than absolutes. The book devotes too many pages to dense general behavioral psychology topics (e.g. the ultimatum game), and the author often sidetracks from making his point by sharing personal stories about a study's researchers. Still, there were some interesting chapters regarding menu pricing, luxury story pricing, infome ...more
Guixin Jiang
This book is marvelous for people who want to study more about pricing, marketing, and how human psychology could subliminally affect the people's decision. The book that I like most is strikes its numerous cases where every theory has an experiment behind it, so it is far more convincing and persuasive. For example, the anchoring effect, which is one of the theory in the book and not only does the book give concrete application of this theory to the reality, but also illustrate how psychologist ...more
This is something of a cheat, since it's a reread. But I had a conversation with a marketing major about what his classes were like, and they sounded completely unlike what I recalled this book covering (psychophysics and behavioral economics), which I had always vaguely expected would be at least in the marketing curriculum. And I thought I should refresh my memory of this book before I recommended it.

I liked it again. It's mostly a discussion of how prices are generally pretty arbitrary and ve
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:
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 t
Jeremy Dooley
Good book. Many profitable insights. Some areas were a bit dense, but the latter half was very applicable.
An enjoyable "did you know"-style book about the psychology of pricing anything from jury awards to ordinary groceries. Contains actual information about real academic studies. And maths.

I realise that many of the studies described in this book are more than familiar to people who have studied psychology, sociology, economics, business, etc. etc. I had read about some of them myself. But I still enjoyed it. I think it was the writing style as much as anything else. There was so little hyperbole
Bill Weaver
I do not know what I was listening to when I heard about this book, but it intrigued me. The first chapter starts off with the lady in New Mexico who won millions of dollars for being burnt when a cup of hot coffee from McDonald's accidentally spilled on her. The second chapter starts with how clueless we are about price. The book continues with examples of how we are manipulated with different pricing structures. Companies will play with packaging to make us believe that we are getting the same ...more
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 purc
David Dinaburg
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 “Pri ...more
Fascinating book about price anchoring, the fact that people what the price of anything should be when they don't have adequate reference points and take cues/clues from anything in their environment even a randomly quoted number. The book goes on to talk about prospect theory and the value people place on various gambles; pricing tricks the psychology of restaurant menus; free 72 oz Steak meals and many other devious marketing tricks. The book attacks the idea of market value but doesn't follow ...more
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 dete ...more
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-writ
Graham Herrli
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 pe
Very interesting (and kind of scary) read. Priceless starts off kind of slow with a lot of background in behavioral decision making theories and history. But once it gets going, the going is good.

To set the tone of how pricing decisions are made, the author delves into the theories of anchoring and adjustment with lab setting examples and studies. It's interesting to learn the subtle tricks that we use on on ourselves and can be used on others to influence their ideas of what a price should be
An excellent book about the abstract concept of "price" and "value". The author starts the book by discussing studies conducted over the past 60 years that highlight some interesting facts about the human mind and human behavior. He shows the the human mind is wired to think relationally, not absolutely. He then gives example after example of pricing strategies and studies that take advantage of this "quirk" of the human mind. One of the main concepts he discusses is "anchoring"--the idea that w ...more
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 restauran
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:

I am a cautious consumer and I gleaned a lot from this book. I have always detested the '99 cent' pricing, but retail continues to use it because, no matter how educated and intelligent people are, they fall for it. How sad. The chapters on menu design and pricing were fascinating. Some of the psychology experiments had surprising results. I had never heard of anchoring before. I did skim through some chapters (they were all short), real estate pricing experiments were not that relevant to me. P ...more
Elizabeth Olson
The strength of this book is the author's gift for spinning engaging narrative from otherwise dry studies at the intersection of economics and psychology. Poundstone's well-supported premise is that none of us, even experts and the most studiously prepared shopper, have any real idea what anything should cost. It seems we're all unduly, and unconsciously, influenced by "anchor" numbers unrelated to the price of the item or service in question. Two examples: A ridiculously expensive item next to ...more
Todd Sattersten
Poundstone told me he started researching a book about Daniel Kahneman and Amos Tversky, two of the most important researchers in the area of decision making over the last fifty years. What he found was that pricing was a good point around which to tell their story and Poundstone covers much more than that Priceless. The narrative takes us from the field of psychophysics to a $72 steak in Amarillo, Texas, all along the way teaching us how easily we can be swayed one way or another.

This bit is a
Wow! As if I was in any doubt that I am being manipulated my the various retailers out there, this certainly clarified things for me. This book describes the "psychology" of pricing and the initial studies that led to many pricing strategies we see now in the stores. Why do so many prices end with 99? Why do some menus have no prices and some not in a straight line? There's a reason. This book also helps me understand some of my own buying behaviour and how subjective the concept of "value" is.

People are easily manipulated. That's the main message of this book, and it's backed with tons of research. But it doesn't get so bogged down in the science that it loses the subject. Poundstone is a master at making a point without boring the reader.

Among other things, this book teaches that:

* It's all in the comparison. A $50 gift from Aunt Marge for your wedding is wonderful, unless you were expecting her to give you $200, like she did your sister.

* Prices are constantly manipulated so that
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William Poundstone is the author of more than ten non-fiction books, including 'Fortune's Formula', which was the Amazon Editors' Pick for #1 non-fiction book of 2005. Poundstone has written for The New York Times, Psychology Today, Esquire, Harpers, The Economist, and Harvard Business Review. He has appeared on the Today Show, The David Letterman Show and hundreds of radio talk-shows throughout t ...more
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“One of the things that price consultants have learned is that what consumers say and what they do are not the same thing.” 0 likes
“Isn't human mind a funny thing? A bullet is a bullet, dead is dead. The reduction in probability of your demise is precisely the same in both cases. Why isn't your price the same?” 0 likes
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