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Old 10-20-2006, 03:37 PM  
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Interesting article on the PSYCHOLOGY of pricing

Psychological "price anchors" might apply to online purchases as well. Here's an excerpt on 'price anchors':

Is $279 a lot of money to spend on an automatic bread maker? When Williams-Sonoma first marketed these then-novel gadgets more than 20 years ago, no shopper knew what a bread maker ought to cost, and Williams-Sonoma didn't sell a lot of them. Then it introduced a deluxe, $450 model. The company didn't sell many of these either, but sales of the $279 model went through the roof. The deluxe bread maker made the regular one seem like a bargain. Conclusion: We are affected by anchors whether it's rational or not, whether we want to be or not.

http://www.latimes.com/news/opinion/...ome-commentary
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