PEP: Price-Exposure Prophylaxis
Identification
Have you ever wondered why TV advertisements extol the virtues of a product before showing its price on-screen? The minds behind that last car ad were probably informed by research done by Karmarkar, Shiv and Knutson (2015) showing that the order in which a product and its price are shown affect consumers' willingness to purchase. In particular, Karmarkar and colleagues (2015) suggest that a consumers' assessment of the finer qualities of a product takes precedence if price is shown after the product, whereas items are evaluated based on general value if the price is presented before the product.
Example
What does this mean? Well, it might mean that when a retailer wants someone to drop thousands of dollars on a new car, they will give you the grand tour of each gleaming, chrome inch before they tell you how much it costs. But if they want you to grab as many cords of firewood as you can lift into your truck, they should put the price right up front, on a sign as you pull in to the store.
Solution
Arm yourself with knowledge! Some items are going to be worth more than others, on principle. But do your research before you buy that new suit. It may be worth hundreds of dollars (it is a nice piece of cloth) but could you find it for $300 instead of $600?