3 ms·
Anchoring doesn't seem to account for the effect here. Anchoring (another term is mental accounting) says that when the price range of an object is high, cons
by fan 17y ago
Anchoring doesn't seem to account for the effect here.
Anchoring (another term is mental accounting) says that when the price range of an object is high, consumers don't mind a $1 change in price as much as when the prices are low. But this doesn't explain why stores wouldn't just charge $1 more for the base system, versus stuffing it into profits on the cable.
At least part of the effect seems to be from consumers merely not accounting for the cost of the cable when deciding when to buy the TV.
As mentioned in the article, its very similar to why printers are cheap but ink is expensive, and why credit cards advertise great features and profit on high hidden fees.
When consumers pay a great deal of attention to a certain sticker price, that sticker price will fall and stores will stuff profits instead into areas when consumers don't think as much about.
- zck 17y agoI think the first comment on the article has a decent explanation: "How about differences in price elasticity? We know that demand for big ticket items are very price-elastic, so they price those items very competitively. But, given that you're already in the store buying something, you may have inelastic demand for the peripherals that you didn't know you needed to buy (or, you didn't know that it wasn't included)." People will drive to another store to save money on a television; they spend their effort comparing these prices. Once they're buying a television from a store, they're (usually) not going to then drive to another store to compare cable prices; they're going to buy the cable at the same store they buy the tv at.