Over at The Atlantic, Derek Thompson has a fascinating feature on the psychology behind consumer pricing, and how retailers take advantage of our overactive emotions and underdeveloped math skills. In The 11 Ways That Consumers Are Hopeless at Math, Thompson presents some stuff you may have heard before (like tricking consumers with the number 9 at the end of a price), but probably more consumer behaviors you've probably noticed but never verbalized.
Take no. 3, for example: We're terrified of extremes. The anecdote, borrowed from the site Conversionxl, tells the story of two types of beer priced at $2.50 and $1.80, where most people bought the more expensive option. After introducing a third option for $1.60, most people bought the $1.80 beer. As Thompson puts it:
We don't like feeling cheap, and we don't like feeling duped. Since we're not sure what things are worth, we shy away from prices that appear too high or too low.
This reminds us of the classic counterintuitive advice about ordering from a restaurant's wine list. Restaurateurs know you don't want to look like a cheapskate ordering the least expensive option, so they put whatever swill they want to move as the second-cheapest and watch it fly out the door. The lesson: Sometimes what looks like the best deal really is.
Read all of Thompson's tips at The Atlantic.