Pricing

  • On Amazon, there are 2 competitive products side by side. Both have an even 4.5/5 stars, and one is $2.00 more than the other. The only other key difference is that this more expensive one has a label on it saying "$5 off". All else equal, the cheaper item is the better bet, since they are both rated the same. The pricing effect here is interesting however, because when we consider the pricier item, we think we would be getting an item that is $7 more expensive for only $2 more. In that sense, it is a great deal.

Good example of how starting at the high price can make the cheaper options look more reasonable