Findings – Calculating Consumer Happiness at Any Price

If you give people a placebo and tell them it’s a painkiller costing $2.50, they can withstand painful shocks better than if they’re told the pill costs a dime. Give them an energy drink at a discount price, and they’ll perform worse on subsequent tests than if they pay full price. If you tell them the wine they’re tasting costs $90 a bottle, then the reward centers of their brains will light up more than if you tell them it’s a $10 bottle.

But suppose, instead of scanning people’s brains as they’re sipping wine in a laboratory, you tested them in a more realistic situation: a restaurant where they’re spending their own money. That challenge was undertaken at an upscale restaurant in Tel Aviv by two behavioral economists, Ori Heffetz of Cornell and Moses Shayo of the Hebrew University of Jerusalem, who expected to be able to manipulate diners’ choices by changing the prices on the menu.

via Findings – Calculating Consumer Happiness at Any Price – NYTimes.com.

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