Why are people more likely to buy articles with a price of \$199, rather than the same (or let's say a slightly better) article for \$200?

On which human brain centre is this advertising focused? Is this some kind of manipulation?

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    $\begingroup$ The phenomenon is called a "price threshold", there is a lot of research on it: scholar.google.com/scholar?q=price+threshold $\endgroup$ – user3116 Jul 3 '13 at 8:04
  • $\begingroup$ Thank you for naming it... it's good point to start there! $\endgroup$ – tsykora Jul 3 '13 at 8:15

An interesting article relating to your first question is the "Analyzing the Psychology of Pricing", where they suggest that consumers don't really notice any change in units of 10, e.g. \$54 vs \$59.99 etc.

In answer to the 2nd of your queries about what part of the brain is affected, here is some research that I found.

According to the article "Marketing actions can modulate neural representations of experienced pleasantness" (Plassman et al. 2007), very little is known about the neural responses to marketing. However, they tested the hypothesis that

marketing actions, such as changes in the price of a product, can affect neural representations of experienced pleasantness.

In another of that author's papers "Branding the brain: A critical review and outlook" (which includes diagrams of the parts of the brain affected), he bases the process on the parts of the brain that control

(1) representation and attention, (2) predicted value, (3) experienced value, and (4) remembered value and learning.

This is also something that many in marketing are actively pursuing, according to "Neuroeconomics: Studying Brain Responses Gives Marketers Increased Ability to Predict How People Make Decisions".

| improve this answer | |
  • $\begingroup$ @tsykora you're most welcome, I am glad I could have helped. Thank you to Jeromy Anglim for fixing that formatting error.. not sure how it got in there. $\endgroup$ – user3554 Jul 4 '13 at 3:54

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