In Malcolm Gladwell’s book review of Chris Anderson’s Free: The Future of a Radical Price (which I learned of from one of my new favorite bloggers and twitterers @danblank) he shares this study from an MIT economist.
He offered a group of subjects a choice between two kinds of chocolate—Hershey’s Kisses, for one cent, and Lindt truffles, for fifteen cents. Three-quarters of the subjects chose the truffles. Then he redid the experiment, reducing the price of both chocolates by one cent. The Kisses were now free. What happened? The order of preference was reversed. Sixty-nine per cent of the subjects chose the Kisses. The price difference between the two chocolates was exactly the same, but that magic word “free” has the power to create a consumer stampede.
I’ve seen and tapped the ...
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