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I have a wild hypothesis about these super expensive audio gadgets: Sure, they're made to be sold, but they also enable the sales of less expensive but still hy

I have a wild hypothesis about these super expensive audio gadgets: Sure, they're made to be sold, but they also enable the sales of less expensive but still hyperbolic gadgets. I've seen reactions to these devices along the following lines: "I can't believe that a $2500 power cable can possibly produce a benefit, so I went with the $500 power cable instead." Bingo, you just paid $490 more than necessary because the $2500 item created an aspiration in your imagination.

RedShift1 5y ago
That's price strategy to make you feel like you've done a good deal and it's absolutely a thing, it happens all the time.
clairity 5y ago
that’s not a wild hypothesis, but a commonly used pricing tactic: anchoring. apple does it all the time with the ‘good, better, best’ framing of their product tiers. the ‘best’ tier is to extract surplus from the price insensitive, but also to make the pricing of the ‘better’ tier seem reasonable. the ‘good’ tier is there to capture the price sensitive, and also uses anchoring on the top two tiers to seem reasonable (it’s also highly marked up, but just not quite as much). the trio of prices are usually bunched around the desired average sales price (asp) for the product, and that set of prices work together to create the anchoring effect. anchoring is used everywhere, from bleach to handbags to wine to cars and everything else.
- klodolph 5y ago
  The "best" tier is also for people who need 64 GB of RAM just to build things, FWIW. Just to pick laptops as an example. I've worked at companies where the build times were long and required gobs of RAM.
  - clairity 5y ago
    yes, that's price segmentation working as intended. companies (i.e., the price insensitive) can afford to spend an extra $1k, even if the markup is otherwise outrageous. it just doesn't matter relative to the long-run productivity gains it affords. that's also why mac pros are in the $10k range, with wheels that cost $500, because that's a drop in the bucket for editing shops relative to the productivity it affords.

RedShift1 5y ago

That's price strategy to make you feel like you've done a good deal and it's absolutely a thing, it happens all the time.

clairity 5y ago

that’s not a wild hypothesis, but a commonly used pricing tactic: anchoring. apple does it all the time with the ‘good, better, best’ framing of their product tiers. the ‘best’ tier is to extract surplus from the price insensitive, but also to make the pricing of the ‘better’ tier seem reasonable. the ‘good’ tier is there to capture the price sensitive, and also uses anchoring on the top two tiers to seem reasonable (it’s also highly marked up, but just not quite as much). the trio of prices are usually bunched around the desired average sales price (asp) for the product, and that set of prices work together to create the anchoring effect. anchoring is used everywhere, from bleach to handbags to wine to cars and everything else.

klodolph 5y ago
The "best" tier is also for people who need 64 GB of RAM just to build things, FWIW. Just to pick laptops as an example. I've worked at companies where the build times were long and required gobs of RAM.
- clairity 5y ago
  yes, that's price segmentation working as intended. companies (i.e., the price insensitive) can afford to spend an extra $1k, even if the markup is otherwise outrageous. it just doesn't matter relative to the long-run productivity gains it affords. that's also why mac pros are in the $10k range, with wheels that cost $500, because that's a drop in the bucket for editing shops relative to the productivity it affords.