In article <[EMAIL PROTECTED]>, Bob Wheeler <[EMAIL PROTECTED]> wrote:
> I don't think this is a statistical question, but rather a psychological > one. It's a well known choice phenomenon that adding a third item to a > mix can shift the buying response. In this case $399 price by itself is > paired with a "no buy" response; however, by adding an artificial third > response of $599, the proportion of buyers in the "no buy" position > decreases to the benefit of the $399 position. It is sometimes called > the Williams-Sonoma response, because Williams-Sonoma added an expensive > alternative to an item that was not selling and were surprised at the > increase in sales of the base item. > > There are some fairly satisfactory theories that explain this in terms > of the status-quo response and the human loss function. Of course, one pays more, net, on a $599 item with a $200 rebate than on a $399 item, because sales tax is calculated on the $599 in the first case and on $399 in the second; the rebate does not take this into account. Whatever misperceptions the consumer may have about the rebate (and I agree with Bob, they may be powerful) it is obvious that the consumer is worse off when the two alternatives are compared. Bill -- Bill Jefferys/Department of Astronomy/University of Texas/Austin, TX 78712 Email: replace 'warthog' with 'clyde' | Homepage: quasar.as.utexas.edu I report spammers to [EMAIL PROTECTED] Finger for PGP Key: F7 11 FB 82 C6 21 D8 95 2E BD F7 6E 99 89 E1 82 Unlawful to use this email address for unsolicited ads: USC Title 47 Sec 227 . . ================================================================= Instructions for joining and leaving this list, remarks about the problem of INAPPROPRIATE MESSAGES, and archives are available at: . http://jse.stat.ncsu.edu/ . =================================================================
