False choices that work

Seth Godin writes:

Just finished buying some checks online. Got to the page with the ridiculous charges for shipping and handling. They were:

Slow…$14 (Expected delivery, December 15th)
Fast…$18 (Expected delivery, December 10th)
Expedited…$18 (Expected delivery, December 5th)

"Wow!" I said to myself, "I’ll show them… I’ll get the expedited shipping without paying a penny more than fast."

As Seth realises, the "Fast" choice was almost certainly a deliberate bluff designed to draw customers towards paying for "Expedited".
But does this sort of shifty trick actually work? Not in the world of classical economics. But behavioural economist Dan Ariely has checked it out, and… it works a treat. His forthcoming book, Predictably Irrational, is strongly recommended.

Tim Harford’s blog

This blog is no longer updated but it remains open as an archive.

Tim, also known as the Undercover Economist, writes about the economics of everyday life.