Derek Thompson writing for The Atlantic:
There are many fancy words for these sort of pricing schemes. The attraction effect. Decoy pricing. Decision heuristics. But it all comes down to this: People don’t like feeling duped, and we don’t like feeling cheap. So we gravitate toward middle prices because they seem “fair,” in context.
$8 a month has always been too good to be true, especially if you have access to the American Netflix catalogue. But now, with the help of a little science, Netflix is going to play on your inner psyche to drive revenue growth.
Pricing based on pyschology seems smart and inevitable. But I can’t help but feel played.