Friday, September 15, 2006

Ever Wonder ....

Why is everything priced at weird dollar amounts, like $4.99 instead of $5.00? It's called Irrational Pricing
Irrational pricing is putting the price of items at say 4.99 instead of 5. Obvious as it may seem, apparently "The reason offered for not instead rounding $4.99 to $5.00 is based on memory processing time. Rounding upward involves an additional decision compared with storing the first digits. Furthermore, due to the vast quantity of information available for consumers to process, the information on price must be stored in a very short interval. The cheapest way to do so, in memory and attention terms, is by storing the first digits." Therefore customers perceive to be getting a better deal than they infact are.

I found an answer on this page: A-Z Tricks to Make you Shop. Now I know why escalators are placed back to back instead of side to side (to get you to walk around the store). I guess I could have figured that out, but it was neat reading it here with the lovely British tone and vocab. It's been a while since I shopped the High Street or stopped in at WH Smith.


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