Expense Account, Mint
You’re taking some friends out for dinner and you’re faced with a choice of five bottles of wine. Which would you pick? Assume your knowledge of wine is as much as mine about cricket, so price becomes your only handle. Your choice set is: Rs1,050, 1,250, 1,550, 2,950 or 5,500 per bottle. Research shows that most people are nudged to choose the one that costs Rs2,950. This pricing of the wines has nothing to do with wine quality or brand but has everything to do with manipulating choice architecture to drive consumers into preferred products. This is now not economics but psychology at play. If you choose any of the first three wines, you fear you may be considered cheap. The last looks expensive. In comparison with the most expensive wine, the one that costs Rs2,950 looks cheaper, yet not cheap. You make the safe bet and tap the 2,950 on the menu and say confidently: I’ll have this one please. And don’t break the cork.