Dan Ariely is a behavioral economist at MIT and the author of a book I enjoyed a lot (Predictably Irrational: The Hidden Forces That Shape Our Decisions). In his latest blog entry, Ariely takes a look at why we hesitate at spending 99 cents for an app when we do no such thing spending several dollars for a cup of coffee or hundreds of dollars for a mobile device.
Readers of his book “Predictably Irrational” will find the concept of “price anchors” a familiar one. Ariely suggests that Apple do something Google is already testing: Really cheap, but not free, apps. Ariely suggests 15 cent iOS apps. Google tested 25 cents apps in the past few weeks. But, would 15 cents vs. free really change the way we feel when deciding whether or not to buy a 99 cent app? Or, would it lower our fretting threshold to 15 cents?