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It is a brilliant use of a simple psychology concept - Sunken Cost. People tend to go further to justify the sunken cost. The Prime members become Amazon's ca
by ww520 15y ago
It is a brilliant use of a simple psychology concept - Sunken Cost. People tend to go further to justify the sunken cost. The Prime members become Amazon's captive audiences. Same thing with the Costco/SamsClub members.
- gwern 15y agoOr it could be due to the mental burden of account-keeping and search, and increases in purchases a perfectly rational reaction to lowered costs. (Sunk cost, you say? Believe me, I know about sunk cost, and sunk cost is vastly over-invoked and probably a minimal problem in individual human psychology: http://www.gwern.net/Sunk%20cost http://www.gwern.net/Sunk%20cost )