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27 of 28 people found the following review helpful
5.0 out of 5 stars Priceless!
This is the latest in a long line of excellent popular science books by William Poundstone. Its topic is "behavioural decision theory", the study of how individuals make systematically irrational decisions in choice situations, risky gambles (where the probabilities are known), and uncertain gambles (where probabilities are unknown).

A lot of this field has...
Published on 5 Feb. 2011 by DigiTAL

versus
2.0 out of 5 stars Too many anecdotes and much biographical information, not enough ideas
As with many of these types of book, the whole thing could have been condensed into 20 pages or so, but has been expanded to over 200. Far too much anecdotal and biographical detail about various economists and psychologists and too little in the way of useful or interesting concepts.
Published 7 months ago by The Philosopher


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27 of 28 people found the following review helpful
5.0 out of 5 stars Priceless!, 5 Feb. 2011
This is the latest in a long line of excellent popular science books by William Poundstone. Its topic is "behavioural decision theory", the study of how individuals make systematically irrational decisions in choice situations, risky gambles (where the probabilities are known), and uncertain gambles (where probabilities are unknown).

A lot of this field has focused on the latter two segments: decision making under risk and uncertainty. This was in some ways due to a methodological quirk, as these two scenarios were much easier to test with experiments, questionnaires, and real-life data.

Poundstone covers both these areas, but he also looks at how some companies are beginning to exploit consumers' common irrationalities. For instance, a fundamental axiom of rational choice theory is the "independence of irrelevant alternatives". Say you are choosing between good A and good B. Adding a third good to the choice menu -- good C -- shouldn't affect your original choice between good A and good B. Say you initially chose good A from the set {A,B}; then, the independence of irrelevant alternatives states that you shouldn't then choose good B from the set {A,B,C} (although you could choose C).

This axiom frequently gets violated in the real world, and clever marketers are wising up to this. Say you are choosing from two vacuum cleaners: a very cheap cleaner (A), and a more expensive model (B). In this case many people would choose A. However, the company can alter your choice by adding a third vacuum cleaner: an incredibly expensive state of the art model costing thousands of pounds (C). Even if you will never buy this new vacuum cleaner (it is an irrelevant alternative), it can still alter your choice: by comparison it will make model B seem much less expensive than before, and will make A seem like a shoddy bargain basement model. The mere presence of C has shifted consumers into spending much more money on vacuum cleaners than they did before, even if nobody buys C.

This book is a lot of fun and well worth the read.
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7 of 7 people found the following review helpful
5.0 out of 5 stars The price of this book is, well, priceless...!, 7 Nov. 2010
If you run a business you need this book. Simple as that. It is, as the title says, priceless. The reason is not that the book tells you how to calculate your prices. Rather it challenges your very thinking about pricing and the strategies and models you might use. Far too many businesses either use guesswork or fancy calculations on pricing that merely dress up that guesswork. This book unravels that methodology and with the help of some fascinating studies shows you what people really are prepared to pay for - and how much. The book goes beyond pricing, as such, and looks at the whole notion of value.

In addition to the great content of this book - all backed up with solid research and references - it is also immensely readable. Indeed, it is broken down into 55 short chapters, so you can read it in bit-sized chunks.

Priceless does not provide you with practical pricing advice, but it certainly makes you think and will definitely help you re-think your pricing models so you can gain more profit. That alone is priceless advice - yet you only have to pay £12.99 for it...!
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16 of 18 people found the following review helpful
4.0 out of 5 stars The construction of value, 22 Jan. 2010
As someone who works in pricing, a book on what constitutes 'fair' value got my immediate attention. The main message is that there is no such thing in absolute terms. What is considered fair will depend on the context, and this context can be manipulated to increase the perception of fairness. While the book does contain some ideas you could implement, it is not a pricing handbook.

The book gives an overview of the field of behavioural economics in so far as it relates to pricing/valuation. If you've read a bit on the work of Kahneman, Tversky, Ariely, Thaler, ... you'll already be familiar with most of its contents. The book's merit lies in the selection it makes within this broad area of knowledge and the author's own observations.

It is set up as a series of short chapters that deal with a specific concept (priming, anchoring, ...), a specific application (99 cent pricing, Free!, ...) or an exploration of influencing factors (intelligence, race, gender, ...).

It's written in an entertaining anecdotal style that doesn't require any previous knowledge on the part of the reader. Anyone interested in understanding how humans can be influenced to find certain prices more attractive will benefit from reading this book. Once you've read this book you'll never look at a restaurant menu in the same way again.
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1 of 1 people found the following review helpful
4.0 out of 5 stars Buy one get one free, 18 April 2012
By 
This review is from: Priceless: The Hidden Psychology of Value (Paperback)
Two themes in this book are picked up in this book which together make it really most readable.
There is a bit of pop psychology that explains how people respond & expect different prices & appreciate the value of things depending on context. I used some of the ideas the following week in pay negotiations at work thefollowing week. It didn't get me any more money because the decisions had already been taken but it could have so maybe next year....

There was a fascinating short chapter in menu
design & layout but Unfortunatly I didn't make a good impression on my dining companion when I started explaining how the menu at the fancy restaurant we were in knew how to extract the highest prices! The book tells this in a much more engaging way than I did.

The 'get one free' part of the book goes beyond the quantified tests that back up these ideas & looks at the frankly loopy (sorry, i mean driven) characters who have developed these ideas mostly in universities & good fun it is

I suspect some people moght struggle with a whole book on either theme but putting the 2 together made it a highly palatable read & I certainly learnt some valuable (not sure priceless) lessons. A strong contender as a different business book that is not another rerun of what part of the brain is creative & what part is rational
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1 of 1 people found the following review helpful
5.0 out of 5 stars excellent book, 24 Feb. 2010
By 
"'Menus,' he said, 'are supposed to be the classic example of free choice, but menu designers have found that there're many ways of getting you to order what the restaurant wants you to order' -- the most profitable dishes, presumably. The techniques he laid out are fascinating: a box drawn around certain items, for instance, always draws the eyes -- and attention -- there. This might mean these dishes best highlight the kitchen's skills, or, more likely, they make the restaurant the most money: The ingredient cost is low, or maybe they take the least staff time to prepare. But, more subtly, the box might not simply be encouraging you to order whatever's in it. 'There are places where there's a $150 hamburger,' Poundstone said. "The first thing everyone does is shake their head. But then you go down the menu, suddenly the $50 steak doesn't seem so outrageous." Our sense of value is always relative, and a technique like this, which gets you over your sticker shock early, can skew that sense just enough for you to find yourself saying, 'I'll have the steak medium rare, please.'"
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5.0 out of 5 stars Priceless!, 13 Feb. 2011
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This is the latest in a long line of excellent popular science books by William Poundstone. Its topic is "behavioural decision theory", the study of how individuals make systematically irrational decisions in choice situations, risky gambles (where the probabilities are known), and uncertain gambles (where probabilities are unknown).

A lot of this field has focused on the latter two segments: decision making under risk and uncertainty. This was in some ways due to a methodological quirk, as these two scenarios were much easier to test with experiments, questionnaires, and real-life data.

Poundstone covers both these areas, but he also looks at how some companies are beginning to exploit consumers' common irrationalities. For instance, a fundamental axiom of rational choice theory is the "independence of irrelevant alternatives". Say you are choosing between good A and good B. Adding a third good to the choice menu -- good C -- shouldn't affect your original choice between good A and good B. Say you initially chose good A from the set {A,B}; then, the independence of irrelevant alternatives states that you shouldn't then choose good B from the set {A,B,C} (although you could choose C).

This axiom frequently gets violated in the real world, and clever marketers are wising up to this. Say you are choosing from two vacuum cleaners: a very cheap cleaner (A), and a more expensive model (B). In this case many people would choose A. However, the company can alter your choice by adding a third vacuum cleaner: an incredibly expensive state of the art model costing thousands of pounds (C). Even if you will never buy this new vacuum cleaner (it is an irrelevant alternative), it can still alter your choice: by comparison it will make model B seem much less expensive than before, and will make A seem like a shoddy bargain basement model. The mere presence of C has shifted consumers into spending much more money on vacuum cleaners than they did before, even if nobody buys C.

This book is a lot of fun and well worth the read.
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5.0 out of 5 stars worth the money, 2 July 2010
William Poundstone has been mining the weirder reaches of reality since Malcolm Gladwell was in short trousers. If you like Gladwell and you can't wait for his next, try this for a treat. It's well written, better sourced and does have some real life lessons.
Poundstone begins with the usual fare for this kind of book. A trip through modern psychology and behavioural economics. So far so interesting, but if you've heard it before... well it can get a bit repetitive. Never fear, the second half of the book takes real life cases such as internet pricing, menu design, anchoring (the best but grossly overpriced and the worst but unbelievably cheap items bracketing... you guessed it .... the thing I want you to buy.
Poundstone has a dry wit and the book is often nearly laugh out loud funny. I don't know if this is deliberate or not, but he also wrote an excellent biography of one of the fathers of the atom bomb, which I still refer to from time to time. Prisoner's Dilemma: John Von Neumann, Game Theory and the Puzzle of the Bomb I'd recommend that as well
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1 of 1 people found the following review helpful
5.0 out of 5 stars Excellent read - though provoking, 28 Jan. 2012
This review is from: Priceless (Kindle Edition)
Very interesting and though provoking book. A bit repetitive in parts but full of fascinating research on the psychology of how we view values, risk and make choices. Not a practical guide to sales or marketing but a study of the underlying unconcious processes we go though and how they can be used to manipulate our buying choices. Well worth reading.
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4.0 out of 5 stars Easy, well written, interesting introduction to the behavioural economics of pricing, 8 Jan. 2012
As a twitter buddy of mine pointed out, with a name like Bill Poundstone you'd be destined to write this book. It's an easy read with plenty of interesting anecdotes which serve to highlight Poundstone's exposition of behavioural economics as it relates to pricing. Brief histories of the personalities involved in the subject helped to sustain my interest; experimental design is important, but it can be a little dull reading about it.

I'm a money freak - history, philosophy, sociology of money - so I approached the book from this perspective. However, I think it would be of interest to the business reader, the academic or indeed the general reader. It gives the reader an insight into the techniques that can be used to set - and achieve - a price. Poundstone shows that what we think about price very much depends on context. On its own, the understanding of the power of anchoring - a bid/offer that sets context for and influences how you'll feel about a price- will repay you the cost of the book.
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1 of 1 people found the following review helpful
4.0 out of 5 stars Absolutely Priceless!, 9 Feb. 2012
This review is from: Priceless: The Hidden Psychology of Value (Paperback)
This book has really changed how I view mundane transactions such as ordering off a menu, house pricing, jury decisions and negotiating job offers. I found it a very good mix of theory and practical info, with anecdotes which are memorable and I've passed on to others. I would highly recommend the book.
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Priceless: The Hidden Psychology of Value
Priceless: The Hidden Psychology of Value by William Poundstone (Paperback - 2 Jun. 2011)
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