Priceless: The Myth of Fair Value (and How to Take Advantage of It)

William Poundstone, Author . Hill and Wang $26 (336p) ISBN 978-0-8090-9469-1

Poundstone (Gaming the Vote ) dives into the latest psychological findings to investigate how and why prices are allocated. Beginning with the controversial lawsuit in which a jury awarded $2.9 million in damages to a woman who had spilled a scalding cup of McDonald's coffee on herself, the author presents a readable history of how we are subtly manipulated into paying more (or less) for goods and services—and the research that attempts to explain our baffling and irrational susceptibility to pricing. The idea of “anchoring and adjustment”—setting an arbitrary number to subconsciously drive higher or lower estimates—is just one of many research areas explained at length. While Poundstone's case studies are vivid, the abundance of theories and experiments might prove overwhelming for the casual reader. Nevertheless, the scope of the analysis—its attention to economic abstractions as well as real-world consequences—braids together theory and practice to leave an indelible impression on the reader. Grocery shopping will never seem so simple again when one realizes how much work goes into assigning a price to a box of cereal. (Jan.)

Reviewed on: 11/16/2009
Release date: 01/01/2010
Genre: Nonfiction
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