Filtered dossier

pricing

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    Cognitive Bias Entry #0102

    The reason yesterday’s price feels like the right price

    A number you saw once becomes the standard against which every later number is judged, even when you cannot remember where the first one came from.

    Adept
    The hidden part #0102

    The last price paid is not evidence of the right price. It is the starting point of a comparison that was never asked for.

    Open file
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    Price Psychology Entry #0367

    Why the cheapest tier exists to be rejected

    A visibly inadequate lowest option is not there to sell. It converts an absolute price judgement into a comparison the middle tier is built to win.

    Adept
    The hidden part #0367

    The lowest tier is not a product. It is the reference the next tier is measured against.

    Open file
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    Price Psychology Entry #0365

    Why an annual plan hides the churn decision

    A monthly cycle asks the customer twelve times whether to continue. An annual cycle asks once, and inertia answers on every day in between.

    Master
    The hidden part #0365

    Retention is not only how much people want to continue. It is how often they are asked to decide.

    Open file
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    Price Psychology Entry #0364

    The reason instalments change what people buy

    A total is compared against savings; a monthly figure is compared against small routine expenses. Changing the unit changes which comparison is made.

    Adept
    The hidden part #0364

    The unit chooses the comparison. A monthly figure is measured against small habits, a total against savings.

    Open file
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    Price Psychology Entry #0363

    Why a discount you did not ask for lowers value

    An unrequested reduction answers a question the buyer had not asked: what the seller can still accept. The old price stops being a fact about the product.

    Novice
    The hidden part #0363

    A volunteered discount does not describe a better deal. It describes how much room the first price contained.

    Open file
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    Incentive Design Entry #0390

    Why free options are consumed wastefully

    A price does two jobs: it raises revenue and it sorts users by how much they need the thing. Remove the price and the second job stops being done.

    Master
    The hidden part #0390

    A price is not only a charge. It is a filter that sorts demand by need, and free resources have no filter.

    Open file
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    Price Psychology Entry #0375

    Why the same product sells at two prices in one shop

    Buyers differ in what they will pay, so a single price leaves money on both sides. A second version exists to sort them by that difference.

    Adept
    The hidden part #0375

    A second version exists to sort buyers, not to serve a different need. Its limitations are the mechanism, not an oversight.

    Open file
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    Price Psychology Entry #0374

    The reason a premium tier nobody buys is profitable

    Its purpose is not to sell. Standing at the top of the list, it makes the middle option the moderate choice instead of the expensive one.

    Master
    The hidden part #0374

    An option can earn its place by shaping the set rather than by selling. Judged alone, it always looks removable.

    Open file
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    Price Psychology Entry #0373

    Why bundling hides the unwanted item

    Sold together, a component nobody would buy alone never has to survive its own decision. The bundle price is judged as one number.

    Adept
    The hidden part #0373

    Bundling deletes the per-item decision. The weakest component survives not by winning but by never being asked.

    Open file
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    Price Psychology Entry #0372

    The reason a refund policy is a pricing decision

    A guarantee removes the risk of being wrong, and buyers pay for that separately from the product. The policy is part of the number.

    Adept
    The hidden part #0372

    A guarantee sells an option to undo, and the buyer pays for it inside the price. Tightening it removes revenue that nobody logged as revenue.

    Open file