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Stingy News Article Link

The price of nails
04/07/12 Permlink | Pricing
"This dramatic change in productivity of nail production has the implication that nails were far more expensive in relative terms back in the 1700s. Sichel offers a number of vivid anecdotes and statistics to support this claim."



More articles on the same topic . . .

People really like free stuff
01/18/14 Permlink | Pricing
"Neoclassical economics assumes that we are rational and that buying is as straightforward as performing a cost-benefit analysis. But when given the option to get something for free and its cost is zero, some fairly wild consumer behavior takes place."

Consumers are hopeless at math
07/06/12 Permlink | Pricing
"You walk into a Starbucks and see two deals for a cup of coffee. The first deal offers 33% extra coffee. The second takes 33% off the regular price. What's the better deal?"

The psychology of discounting
06/28/12 Permlink | Pricing
"Consumers often struggle to realise, for example, that a 50% increase in quantity is the same as a 33% discount in price. They overwhelmingly assume the former is better value. In an experiment, the researchers sold 73% more hand lotion when it was offered in a bonus pack than when it carried an equivalent discount (even after all other effects, such as a desire to stockpile, were controlled for)."

Information suppression in competitive markets
05/28/12 Permlink | Pricing
"Following Becker (1957) we ask whether competition eliminates the effects of behavioral biases. We study products with add-ons. In competitive markets with costless communication, Bayesian consumers infer that hidden prices are likely to be high prices. Hence, firms choose not to shroud information. However, information shrouding may occur in an economy with some myopic consumers. Such shrouding creates an inefficiency. Sometimes firms have an incentive to eliminate this inefficiency by educating their competitors' myopic consumers. However, if add-ons have close substitutes, a"

'Fair and square' pricing? That'll never work
05/28/12 Permlink | Pricing
"Sounds like a sales pitch aimed at consumer advocates and collectors of fine print frustration, like me. As it turned out, it was a sales pitch that only a consumer advocate could love. Shoppers hated it."

A monopoly a day
03/08/12 Permlink | Pricing
"As Apple prepared to introduce its first iPad, the late Steve Jobs, then its chief executive, suggested moving to an 'agency model,' under which the publishers would set the price of the book and Apple would take a 30% cut. Apple also stipulated that publishers couldn't let rival retailers sell the same book at a lower price."

Newspapers, Paywalls, and Core Users
01/04/12 Permlink | Pricing
"This may be the year where newspapers finally drop the idea of treating all news as a product, and all readers as customers."

Friday's deals may not be the best
11/25/11 Permlink | Pricing
"Professor Etzioni, who teaches computer science at the University of Washington, has directed his considerable intellect at the American ritual of shopping for bargains on Black Friday. After examining billions of prices of consumer electronics, he has decided to spend the busiest shopping day of the year scuba-diving in Bali."

The razors-and-blades myth
09/16/10 Permlink | Pricing
"Gillette hadn't played razors-and-blades when it could have during the life of the 1904 patents and didn't seem well situated to do so after their expiration, but it was exactly at that point that Gillette played something like razors-and-blades and that was when it made the most money. Razors-and-blades seems to have worked at the point where the theory suggests that it shouldn't have. Why is that? Did Gillette succeed because of quality or were their powerful even-if-hard-to-discern-now locks - psychological or otherwise - between the razors and the blades?"

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