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Comment by ustad | Hacker News Reader

Studies have shown that when companies present an overwhelming number of choices, consumers often end up spending more. The psychology behind this is rooted in decision fatigue, where consumers are more likely to choose something familiar or assume that a more expensive product is the best choice.

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I have always heard of different conclusions from too many choices. It was from a study known as the "Jam Experiment." [0] They found that in a grocery store that if customers had six choices, they bought more jam than if there were 14 choices.

They termed it decision paralysis.

[0] https://scottfenstermaker.com/too-much-choice-the-jam-experi...

The version I'm familiar with was more about driving consumers to a middle-priced version by adding a more expensive version.

Offer version A at $10, and version B at $50, most people pick A.

Offer version A at $10, version B at $50, and version C at $25, most people pick C.

What you're referencing is usually called the decoy effect, which isn't the same as decision paralysis.

Never heard of decoy effect. Always referred to this phenomenon as “anchoring”

> Never heard of decoy effect. Always referred to this phenomenon as “anchoring”

Correct. The example they gave is anchoring.

Anchoring typically looks like $10-$25-$50, and they want you to buy the $25 item. Sometimes the presence of the $50 item can have zero sales, but the $25 item will sell better than if the options were just $10 and $25.

Decoy would be more like $10-$40-$50, and they want you to buy the $50 item and the $40 item has less than it’s sticker value. Decoy is commonly used to encourage people to buy at the top of their budget range (as one example).

Reminds me of Apple’s pricing scheme

Personally, when presented with too many choices, I always feel like some of the choices are the wrong ones - perhaps the cheap ones are garbage, or quite oppositely, you're paying an extra for nothing - and I'm afraid of being a fool for picking them.

No matter how it goes, it's always a negative experience for me.

Interesting. A while ago I looked at laptops and when I looked at Dell and Lenovo I couldn't figure out how to choose between all the models (dozens or probably hundreds). Ended up with a Framework laptop.

Ah, psychology.

Pretty sure that worked on me. I waited for the iPhone SE 4 (now called the 16E), then when I saw the feature set for the price, just went for the vanilla 16. This was while I was knowing exactly how the 16E was acting as a price anchor to move me to the next tier.

For a long time, Apple’s line up included an under powered option that’s too cheap to run well, an over-powered over-priced option with features most people don’t need, and a Goldilocks version.

Yes, the expensive version anchors the price higher, but it always felt like a gift, in that they had picked the middle version that balanced performance and price already.

This might apply to perishable consumer goods like soap and shampoo, which are cheap and have perfect substitutes. I don't think it would apply to expensive durable goods where more time and research goes into the purchase decision, and there are no perfect substitutes.

Do not be addicted to metrics. Steve Jobs would tell you that while you might help profits in the short term, you're undermining the long term product experience. Don't sound like an executive whose compensation is tied to profit metrics. That is not the only form of success just because it's the most measurable. Measurability does not necessarily equate to most impact.

Isn't it just a "price laddering" strategy.

Where you make the prices of a maxed out lower tier product be more expensive than a barebones higher tier, so it incentives you to "ladder up" your product choice.

Best explained by MKBHD

https://www.youtube.com/watch?v=NiNYOZZLOyg

I think I'm just going to fatigue myself back to my old Android phone and ancient iPad (of some sort) from the last decade...

"Studies" like what?

'The paradox of choice' says the exact opposite. When presented with more jams to sample, more groceries shoppers stopped to try, but less actually bought. Reducing decisions is conversion 101.

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