Find out more about Behavioral Effects
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Confirmation Bias
Confirmation bias describes the tendency to look for, or interpret information in a way that is consistent with one’s existing beliefs. ...
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Endowment Effect
The endowment effect describes buyers' tendency to value a good higher once they own it. In pricing, a free subscription period t....
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Nudging effect
The default nudging effect describes the predictable altering of user behavior through positive reinforcement....
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Preference for the Middle Option
The preference for the middle option, or "compromise effect", describes a buyer's tendency to choose....
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Price Anchors
A price anchor sets buyer expectation at a certain price level. This is often used to make the list price look comparatively cheaper...
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Price Thresholds
Buyers perceive prices below price thresholds significantly lower than they actually are. Studies find that the use of price thresholds ...
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Social desirablility Bias
Social desirability bias reflects respondents' propensity to answer what is perceived as socially acceptable, rather than the...
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The Power of Free
The Power of Free or “Zero Price Effect” describes the phenomenon that people tend to choose a product if it includes a free element...
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Time pressure bias
Time pressure causes a higher propensity of decision makers to shift from logical and rational processes to intuitive processes...
Find out more about Pricing Methods
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Competitive Pricing
Competitive pricing is the process of selecting the optimal price points for a product or service, considering the pricing behavior of competitors ...
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Economy Pricing
Economy pricing is a volume-based pricing strategy in which prices are set low and revenue is generated by the volume of products sold....
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Penetration Pricing
The basic idea of penetration pricing is to attract customers to a new product or service by offering a low price ...
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Price Skimming
Price skimming is a price strategy where firms charge high prices in the initial stage and lower their prices over time ...
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Value-based Pricing
Value-based pricing is a pricing strategy in which companies base their prices on the customer’s perceived value of a product or service ...
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Cost-plus Pricing
Cost-plus pricing describes the practice of setting the price based on the marginal cost of producing a good or service and adding a mark-up ...
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Elasticity-based Pricing
If a pricing manager knows a product’s price elasticity, they can easily model the effects of a price change on sales, revenue, and profit for that product...
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Behavioral Pricing
Unlike the other methods, behavioral pricing does not offer a full recommendation, but rather it is used in combination with other methods such as value-based pricing ...