It employs the anchoring effect, when the first element you encounter influences how you feel about every other price. In a TED talk, psychology and behavioral economics professor Dan Ariely described an anchoring experiment he did with MIT students, on the Economist’s subscription prices. At the time, the Economist listed three choices: $59 for... See more

“Good pricing is not about the price.  It’s about getting in each customer’s shoes and knowing exactly how they derive value from your product.” - Ian Clark