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I often wonder what uplift the U.S. economy gets because consumers are lured by an initial low price that doesn't include service fees, taxes, gratuities, etc.
by louprado 9y ago
I often wonder what uplift the U.S. economy gets because consumers are lured by an initial low price that doesn't include service fees, taxes, gratuities, etc. It's like an accepted form of bait-and-switch, which is a proven tactic that increases sales.
- Spivak 9y agoI'm sure it has some effect but it's certainly diminished by the fact that everyone is aware of the markup and it's the same everywhere.
- SirZimzim 9y agoThe worst part is the effort required to see your actual price. Especially if it requires creating an account for a new service.
- conanbatt 9y agoGreat questions that behavioral economics studies. The answer is that the perceived utility varies on how you perceive the price. This is why an item tagged 10U$S looks less interesting than the item tagged -20U$S- 50% off. The latter looks more valuable to our brain on anchoring, but there really isn't an objective difference. Thus , even though as a user you know the discounts are bs, you still prefer to see the discount thing. Gratuities have the added complexity that people will tip differently on personal preference. I am one of those that dislike tips. I come from a country where tips are relatively low,and I find the tipping amounts in the U.S. borderline offensive. Are waiters supposed to get 20% of the restaurants revenue in tips? But, its like price differentiation: it allows the same recipients to pay more. I wish it didn't have to be this way, but if a business does get more money with these systems, they should do it, and if people are willing to pay more money with these setups they will tend to pay for it.