Sublime

Most remarkable of all, however, was that each book was priced according to Amazon’s website algorithm, which adjusts prices in real time based on supply and demand.

one useful strategy Amazon has found is to undercut their competitors on popular products but actually raise the prices on uncommon products, such as by discounting bestsellers while jacking up prices on obscure books. The idea is that most people will just search for the most common products (which will end up being cheaper on Amazon), so they’ll

prices signal status and social prestige and therefore offer the buyer an additional level of psychosocial utility. This is known as the Veblen or “snob” effect. The price itself becomes an indicator for the quality and exclusivity of luxury products. A Ferrari wouldn’t be a Ferrari if it costs only $100,000. The demand curve for such products—at l

The most impressive effect was on how much they spent in the micropayment condition, where they were forced to think about the payment every time prior to purchasing (paying during). In this condition, the average participant spent just 4 cents.

Value Based on Perceived Effort

• People's willingness to pay for something depends on perceived fairness.


• Fairness relates to how much effort people put in to provide the value.


• Dan Ariely provides an example of asking someone for a quarter at a parking meter.


• People are unwilling to pay a dollar for a quarter from a stranger.


• However, people are willi