What’s funny is that it works even when people know the initial price is bullshit.
A study at MIT had people participate in a silent auction. They were asked to list the last two digits of their social security number and then asked if they would be willing to pay that many dollars for each item before placing their bid.
On average, people with higher SSN digits bid more.
For anyone who wants to know more, Dan Ariely’s book Predictably Irrational goes into great detail about this, and many other experiments.
Libraries carry it, so you could read it for FREE!
^ that bit is a reference to one of the chapters, which talks about how our purchasing decisions are skewed heavily when we’re offered something FREE!
I’m sorry It sounds they were asked to bid using the last 2 digits of their ssn. Of course people with higher numbers bid more
No, everyone wrote the last two digits of their SSN at the top of their papers. Then they were either asked “how much would you bid for this” or “would you pay x amount for this” and those with higher SSN values overwhelmingly were willing to pay more than their counterparts with lower SSN values.
That’s funny, whenever people do that, I just assume they wouldn’t sell without making a profit. And unless it’s immediately valuable to me, I don’t buy.
There is normally a large spread between retail and used price of consumer goods, especially if it’s not a hot commodity with a big resale market. The explanation in the comic is at least plausible; if someone got something as a gift, but they want cash instead, their only option could be to sell it at a significant discount. Same goes if they bought it themselves at some point but need to come up with money quickly.
Exactly. And if for some reason they truly were selling it for less than it was worth (doubt), there’s only two assumptions I’d have:
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There is something wrong with it, which is why it’s being discounted.
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The product is unappealing, they produced way more than there was demand for, and it should probably be worth even less.
I don’t like approaching economics with the idea of “everything is a scam”, but capitalism makes it so that people charge whatever they think they can get away with. Everyone selling you something is trying to maximize the amount of value they can extract from you, and so there is always some angle being worked. Hence why one must always question what it is they aren’t saying.
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Is that how like when the police murder someone then the media rushes to show stories where police help baby duckies cross the road ?
Is anchoring like that ?
No, that’s PR
Fuck that’s clever. I’m gonna claim to incorporate it into everyday life from now on, then forget about it until someone brings it up again!
This trick used to be €200.
But you can have it now for €20.
Oh
