Monday, December 07, 2015
Consumers fall for illusions regularly. They know better but the perception that they are getting a good deal, for example, is stronger than the actual value of the offering. Consider outlet stores. There is no way they can offer discount prices on excess merchandise from mainline emporiums. For one, there isn't that much of it. Secondly, there are too many discount outlets. In fact, discounters offer cheaper merchandise whose value is reflected in the price, but shoppers come anyway. It might be that consumers are not fooled at all by the discount store label and are price-sensitive. If so, both the retailer and buyer accept the perception that the shopper is getting a good deal when they know they aren't. Humans are far from fully rational creatures.