"The willingness to pay is determined by the value of the product", says classical rational economic theory. Learning 1 has already showed that this isn't always true. In the example provided in learning 1, we observe that not showing the currency of the price can increase sales.
Additionally, there are more "irrational" factors that increase consumers' willingness to pay.
Increase sales by showing the highest price first
Suk, Lee and Lichtenstein studied how the display of prices influenced sales. They did this in two ways: displaying ascending lists of prices (from lowest to highest) and displaying descending lists of prices (from highest to lowest).
The study was repeated three different times and each time the researchers came to the same conclusion: people are prepared to pay more if the prices are decreasing rather than increasing (high prices at the top and low prices at the bottom).
- It was studied in a restaurant by changing the beer list every two weeks with ascending or descending prices. Results showed that more expensive beers were bought with a descending price list.
- It was also studied with the sales of marker pens. Price lists of seven markers were displayed in ascending or descending order. Results showed that the average price of a purchased marker was higher with a descending price list.
- It was also studied in an Italian restaurant with the same result: more expensive pasta dishes were chosen when consumers used a descending price list.
High prices create an anchor
High prices in a descending price list provide an 'anchor' as the high prices are the first prices consumers encounter. With a high anchor, relatively high prices are more likely to be accepted. In contrast, with an ascending price list, the low prices serve as an anchor, making further higher prices seem a lot higher and more (emotionally) painful.
This learning is another good example of the irrational influence of prices which you can leverage for your own products and services.