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Did you know that nearby numbers can influence the reference price? In a study, researchers issued music DVDs on a boardwalk in West Palm Beach. Every half-hour, a nearby shopkeeper switched the price of a sweatshirt between €10 or €80.
Selling €80 sweatshirts turned out to benefit CD sales because it would make them appear to be more affordable.
You might also know this bias as the anchoring effect.
People took a look at the last two digits of their Social Security number in another study. If those digits were high, they were willing to pay a higher price for products.
This phenomenon occurs instinctually, even if researchers concocted a concealed experiment to manipulate the subject.
Make sure to run experiments that show high numbers near your price:
The greater the reference cost, the lower your real cost appears.
Are you curious about how to apply this bias in experimentation? We've got that information available for you!
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