I have to admit that I am going through a phase. This is not unusual. At the moment it’s Blakes 7. And it’s taught me a nice little Behavioural Economics lesson.
I found this on ebay recently – priced to buy at an amazing £129. Wow !
That’s a lot of money for what is essentially a rubbish publication from the late 1970’s. The average going price for a mint one of these is a little over a tenner.
So, what is going on I wondered ?
Then I found another for sale by the same seller for £30
Still three times the market value.
What could be going on?
Is the seller in some way unhinged ? Is it coming back to our TV screens? Is Blakes 7 suddenly an investment opportunity that I’ve missed ?
In point of fact, it’s a nice example of Behavioural Economics in action – one particular technique called Price Anchoring.
Clever though our brains are , they are also lazy. This means that they never evaluate anything in isolation, we compare everything. Quite often to the most recent thing or number we’ve seen.
So, by showing a very expensive price, the lower price now seems to be great value.
Even if it isn’t.
Think it only happens on eBay ? Well, go and buy yourself a nice bar of milk chocolate.
Green & Black’s milk chocolate 100g for £2.00 or Tesco 100g Everyday Value for 30p or Cadbury’s Milk Chocolate 120g for £1.50
I’m also going through a chocolate phase !