Can showing competitors’ prices online ever work?
This is an interesting article. It discusses the practice of showing your competition’s prices alongside your own. The idea is that if a browsing customer can see your competitor’s prices, they’ll be less likely to leave your site. It’s based on the assumption that people are going to comparison shop anyway, so why not give them the information they are seeking while keeping them on your own site.
I agree with assumption. People are going to comparison shop, especially on the web. But I think there is a missing component – price isn’t always the determining factor in a purchase. (If it is, then you have what’s called a ‘price-taker,’ and those people don’t make very good customers anyway.)
If prices are equal, then a consumer will start to use other criteria for the decision to buy. The criteria range from previous purchases to payment methods to look-and-feel of the site. Even complex programming capabilities could influence the buy decision. I know I’ve personally bought several books from Amazon just because they recommended them to me as I was buying something else.
Keep that in mind. People are going to comparison shop, but prices aren’t the only factor affecting the buy decision.
Here’s an interesting story about analyzing the link between social connections.
Project ‘Gaydar’
Here’s an article discussing how the current financial models failed us.
Wall Street’s Math Wizards Forgot a Few Variables
Behavorial economics and finance are going to start booming.
Here’s a very interesting article on the idea of ‘free choice.’
“Free choice” may not be as free as it seems
The article explains that the subjects decision to press a button was made well before they were conscious of the decision.
This isn’t discussed in the article, but there’s another takeaway. If you are a marketer, sales person, or someone else involved in changing minds, it’s hard to rely on a person’s own accounting for their decision making. Because there are so many things occuring at a subconcious level, it’s hard for us to say which specific details were responsible for our decision.
If you’ve ever had a discussion about something controversial – politics, religion, life/death – you’ll often find that there is never really any progress made on either side of the argument. That’s usually because each side has a deeply rooted emotional belief in their viewpoint and they don’t change their mind to arguments of logic and reason. Weirdly enough, the only facts they listen to are the that support their original viewpoint.
Here is an article discussing that issue. If you’ve followed Tversky and Kahneman, you’ll be familiar with some of the ideas.
Link: How We Support Our False Beliefs
Also, here’s an extended discussion based on the article but using it to discuss topics in medicine. Interesting read.
Link: “There must be a reason,” or how we support our own false beliefs