Three things on pricing

• When you pay for something expensive(-er), you have a risk – that item may be good or bad; when you pay little, it’s a guarantee – it’s bad. This is true in lots of cases. What you generally get is the mind safety and peace that you have at least a chance of getting something better. You pay for the mind comfort of knowing you might actually get something good. There are countless cases in which more expensive doesn’t lead to better. The fact that these are the exception, not the rule, only strengthens the rule. (this was said by an Economics teacher I had in school; he told it in the context of salaries – “pay somone a high salary, and you may have a good or bad employee, it’s a risk; pay someone a small salary, and, since the good people will always find a better paid job, you’ll have a certainty of having a poor employee”)
• In electronics, to get only marginally better products, you pay very high margins. Samsung Galaxy S4 is not 4 times better than a 4 times cheaper phone. An iPad is not 2-3 times better than an average tablet, as it is 2-3 times more expensive. If you can’t settle with little/average quality, you’ll pay much more. (Original quote – “Este absolut incredibil cat de putina “value for money” poti cumpara in ziua de astazi, cam tot pe ce-am pus mana high-end m-a dezamagit teribil. In general platesti 500% peste pretul “pietei” ca sa ai sporuri de sub 10%, atat in ergonomie cat si in calitatea materialelor si mai ales in software. Oribil.” (source))
• When you buy something, you are more commited. You get involved. You ask for things. You perceive things as more valuable (Original quote – “Buying requires emotional commitment. Even a small payment has been shown to change the way people set expectations, not just for what they receive but how much energy and effort they’re willing to contribute. It begins with confirmation bias, because if you paid for it, it must be worthwhile.” – Seth Godin)

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