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

3.84  ·  Rating details ·  1,672 ratings  ·  171 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 ...more
Paperback, 352 pages
Published January 4th 2011 by Hill and Wang (first published 2010)
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David
Feb 24, 2010 rated it really liked it  ·  review of another edition
Shelves: read-econbiz
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
...more
Jamie
May 28, 2010 rated it liked it  ·  review of another edition
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
...more
Julie
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
...more
Chad Post
Jul 03, 2011 rated it it was amazing  ·  review of another edition
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
...more
Jenny
Sep 16, 2013 rated it liked it  ·  review of another edition
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: http://www.actionablebooks.com/summar... ...more
AV
Mar 10, 2020 rated it really liked it  ·  review of another edition
For a psychology nerd like me, it was a great read. The book has detailed, experiments after experiments related to pricing, valuation (products), negotiation tactics (related to pricing) and other psychological concepts such as anchoring and prospect theory.

Couple of reasons why it was a little downer for me were,

- I bought it with an expectation to learn "how to price products", maybe based on real examples of the popular consumer products. Sadly, this wasn't to be found anywhere. In fact, on
...more
Graylark
Mar 21, 2018 rated it really liked it  ·  review of another edition
This was interesting and informative as fuck. Not just for marketers (although it is tremendously useful for the field), but for the everyday consumer.

Every chapter was peppered with anecdotes and case studies where you saw people acting in peculiar ways according to internal prompts they didn't know they were following. The author then explained what the researchers extrapolated from that, and the resulting rules of thumb for pricing/ marketing.

Perhaps the only criticism I can offer is that s
...more
Warren Mcpherson
An exploration of the psychology of pricing. The book lays out some high-level theories that relate to pricing and then details experiments that show some interesting features of human behavior as it relates to pricing and value. There are some interesting nuggets about how people react to the idea of fairness and how many elements of consumer experience are manipulated. It's a bit hard to put your finger on a central insight, the book sort of ends with a shrug.
...more
Patrick Stuart
This is an interesting book about price.

Its written for business people. Chapters are short and punchy with a form as regular as poetry; a set-up, investigation, explanation and then musing on meaning.

"One of America's longest-running Guy Grand pranks takes place every day just off 1-40 in Amarillo. A giant steer statue us blazoned with a sign advertising a FREE 72 OZ STEAK."

From here we descend into the Gospel of Poundstone, or more like the Torah of Poundstone as the Gospels themselves are mic
...more
Unwisely
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
...more
Uwe Hook
Jun 12, 2010 rated it really liked it  ·  review of another edition
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
...more
Adam Wiggins
May 16, 2011 rated it it was ok  ·  review of another edition
Shelves: gave-up
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
...more
Дмитро Булах
Jun 02, 2015 rated it really liked it  ·  review of another edition
Shelves: cognition
'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 fa
...more
Greg
Jan 04, 2011 rated it did not like it  ·  review of another edition
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. ...more
Ajay Palekar
Dec 26, 2019 rated it did not like it  ·  review of another edition
Overall, was unamused and slightly bored by the book. Mislead by the tag-line and reviews. Didn't find much value in reading it and would not recommend. It's redemption lies in its wealth of examples of the mental quirks that could be exploited by marketers, but it lacks overarching structure or principles that could be utilized by aspiring marketers or now knowledgeable consumers looking to defend themselves. Other books also do a better job of speaking of these psychological and behavioral fla ...more
Sid1983
on ON

Prices, 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
...more
Alok Kejriwal
Oct 15, 2018 rated it it was amazing  ·  review of another edition
This book IS PRICELESS!

I haven't read a book like Priceless by William Poundstone in a long, long time. Now, I've been reading many books (have even written one) & have shared some of my extraordinary finds, but Priceless IS 'Priceless' for many reasons:

- The sheer scope of applicability! You can read AND use this book almost instantaneously in everyday life.
- The sheer volume of real-life examples, case studies, experiments and business applications makes this more of a textbook more than a co
...more
Terry Koressel
Aug 02, 2019 rated it really liked it  ·  review of another edition
Priceless was not priceless...but, absolutely, it is an outstanding book on the psychology of pricing. With pricing becoming a near science in some business sectors, Priceless offers an invaluable perspective. It's main premise is that the economic view of pricing....as the equilibrium between supply and demand forces...is lacking in that it does not take into account the human mind with its biases, its logical shortcuts, its need for comparative information and its vulnerability to manipulation ...more
Suhrob
Jun 18, 2017 rated it it was amazing  ·  review of another edition
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 woul
...more
John
This is not so much a book as a collection of very short (1-5 pages) analyses of pricing experiments done throughout the 20th century. The early chapters make up a short history of behavioral decision theory, and the later chapters examine this field in various situations (buying and selling cars, salary negotiation, etc.).

Perhaps the one great takeaway from this book is the concept of anchoring, or the first number offered in a sale/negotiation/conversation. The mere introduction of a first num
...more
Katherine
Mar 20, 2020 rated it really liked it  ·  review of another edition
Shelves: science, nonfiction
Priceless is one of those books where you find yourself every few pages looking around for someone to tell about what you just read. (Now imagine that sentence written well.)   


The psychology of how we assign and evaluate prices, it turns out, is kind of wild stuff. It's shocking to what degree suggestions and even random environmental cues influence our thinking about anything related to numbers-- price, quantity, size, etc. And Poundstone's writing is approachable and fun. To be honest, Pricel
...more
Louise
Jul 06, 2018 rated it it was ok  ·  review of another edition
Shelves: psychology
I made it halfway through but the author’s obsession with the probabilities of decision-making (i.e., behavioural economics) is pretty tedious. I’m just not convinced that a probabilistic approach to decision-making research helps us understand human behaviour, even when the approach shows that humans don’t make the most probabilistically advantageous choice (e.g., that we aren’t the rational beasts that traditional economists would like to think). This approach assumes that financial outcome is ...more
Warren Paris
Feb 19, 2019 rated it really liked it  ·  review of another edition
Clear, for the most part, in explaining that people are inept at knowing value.
The fictional value attached to money is being used to exploit the regular person.
It is a useful tool for those looking to be more adept at saving a little more when purchasing. Also, noticing scams can be easier.

One way to realize this is just by looking at the prices for goods on Amazon and in Walmart. The prices are marked up so much compared to the purchase price. Since people have no value for their time or mon
...more
YHC
Jul 08, 2017 rated it really liked it  ·  review of another edition
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.
...more
Mostafa
Oct 13, 2018 rated it really liked it  ·  review of another edition
This book is not offering a standard pricing schema that you can use in your business because there is None actually.
The book is a great introduction to the factors that MAY controls customer's interpretations of the price tag on a product or a service. but you will need to following your reading with other books discussing and explaining psychology in general and the behavioral economics specifically.
the Author has gone through many theories and explained them very well through the book and lis
...more
Robert Gebhardt
Oct 09, 2020 marked it as dnf-might-revisit  ·  review of another edition
It turns out that spending a couple of years studying behavioral econ, behavioral finance, and behavioral (fill in the blank), and reading Daniel Kahneman, Richard Thaler, Dan Ariely and the like, pretty much covers most of what this book seems to offer.

I'm only 50 pages in, but that's my impression, and skipping ahead I see the obligatory Ultimatum game, prospect theory, and other points. I might come back to it if I want a rehash.

I expected this book to be more business-related, so this migh
...more
Graeme Newell
This book was a collection of many short articles on individual research studies done on the science of persuasion and pricing. Its lack of a narrative structure made it a bit disjointed and hard to follow.

Mercifully, the author was fairly clever and entertaining. I was a bit surprised to see a science guy with so much writing talent. :)
Victoria
Jan 07, 2019 rated it it was amazing  ·  review of another edition
Intriguing book that covers many theories that influence retailer's pricing strategies for consumer products. Poundstone elaborates on studies that support prospect theory, loss aversion, extremeness aversion, and many others. Would recommend this book to those who believe that fair value is easy to determine - it may prove you wrong :) ...more
James
Jan 04, 2018 rated it it was amazing  ·  review of another edition
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.
Margarit (Mark) Ralev
Useful book for sure.
No matter if you develop your own business or you are just a consumer - it's weird not to be interested how the prices all around you are formed and how much the things actually "cost" in the heads of everyone.
...more
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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.” 1 likes
“Many people like myself who teach marketing start the course by saying, ‘We’re not about manipulating consumers, we’re about discovering needs and meeting them,’ ” said Eric Johnson of Columbia University. “And then, if you’re in the field awhile, you realize, yes, we can manipulate consumers.” 1 likes
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