We are “predictably irrational,” as Dan Ariely says in the book Predictably Irrational: The Hidden Forces That Shape Our Decisions. We like to think we are all clear thinkers and good decision-makers, yet time and again we make bad decisions. Don’t believe me? Then why do placebos work so well? 
Dan Ariely found that when the same aspirin was compared, one low-priced and the other higher-priced, the higher-priced aspirin worked better. He also found that if someone tells you the price of wine has an impact on the taste—the more you pay, the better it tastes. I did a blind wine tasting with a group of friends. One of the least expensive wines won the taste test. The $200 bottle (yes, it was a gift) finished in the middle of the pack. But when I revealed the bottles and their costs, several of my friends came up after to try the expensive wine a second time and said that the expensive wine actually tastes much better than they originally thought.
One of the most powerful ways to show our irrational behavior is how we don’t see the lower numbers on prices. If gas is $3.599 we don’t round-up the one-tenth of a cent to make it 3.60. We also tend to see all prices as lower if they are below thresholds: For example, $399 seems a lot less than $400. Car dealers have been using this technique successfully for years. But why don’t you see nonprofits offering raffle tickets for $29, or asking for contributions of $999 instead of $1,000? Because we all believe we are not susceptible to the powers of irrational behavior. Yet even high-end sellers know the power. Like Bently. That is $2,999 per month by the way.
Marketing decisions are driven by our desires and how we view ourselves, rather than with reality. If you don’t agree, you need to read the book. If you do agree, still read the book, but you are ready to market.
One-Minute Marketer® 