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What's in your £5 pint? | Nudge Newsletter

Price Transparency Read online I spent far too much time moaning about the price of pints. I'd harp on about the £3 ales I used to buy and how they're £5.50 today. And then I saw this image. Taken from The Times based on figures from Ukospitality and the British Beer and Pub association 13p profit!? Suddenly £5 for a pint seems quite reasonable. And there's evidence to prove this price transparency tactic works. In 2020, Harvard researchers¹ tested the effects of showing a product's...

Humor Effect Read online Are funny ads actually more 𝒎𝒆𝒎𝒐𝒓𝒂𝒃𝒍𝒆? That's what seven Californian¹ researchers set out to test in 2014. A group of participants were instructed to remember a long list of words. 50% of the participants then waited for 20 minutes in silence. 🤫50% of the participants then watched a funny 20-minute video. 🤣The researchers asked both groups to recall as many words as possible. Those who sat in silence remembered just 20% of the words. 🤫For those who watched the...

Barnum Effect Read online Why does the ad on the 𝐫𝐢𝐠𝐡𝐭 capture attention? Well, it might be down to the question.Rohini Ahluwalia and Robert Burnkrant's study¹ in 2004 tested two types of ads. Statement-based ads: "You haven't had a pear in a while."And... Question ads: "When was the last time you had a pear?" The researchers found that ads using questions are rated 14% 𝐦𝐨𝐫𝐞 𝐟𝐚𝐯𝐨𝐮𝐫𝐚𝐛𝐥𝐲 than statement-based ads. So, why not turn your statement into a question? I tested this myself in two...

The Country-of-Origin Effect Read online You’re thinking of buying a new pair of running shoes. Usually, you go with Nike. But this time, you’re considering Umbro (a lesser-known brand). Then you find out: Umbro makes their shoes in the UK. Nice. It's always good to find locally made brands. You’re willing to pay a decent price. But the next day, you hear Umbro are moving production to South Korea. Now, would you still pay the same? Probably not. That’s exactly what these researchers¹ found....

The Anchoring Effect Read online In the 1970s, Tversky and Kahneman¹ ran a simple experiment. They asked people: "What percentage of African countries are in the UN?" But before answering, participants had to spin a wheel with numbers from 0 to 100. The wheel was rigged to land on either 10 or 65. Then came the important question: "Is the actual percentage higher or lower than that number?" After that, participants gave their best estimate. Here’s what happened: People who saw 10 guessed 25%...

The Illusion of Choice Read online Give people $1 and two identical packs of gum. Same flavour. Same price. What happens? Most people aren't interested. That’s what Kim, Novemsky, and Dhar¹ found in a South Korean experiment. They gave participants ₩1,000 and two gum options, both priced at ₩630. Only 46% bought anything. But then they did something clever. They made the prices slightly different: ₩620 vs. ₩640. Now 77% decided to buy. Same gum. Slight price difference. Big impact. Why? When...

Input Bias Read online Does the 𝐞𝐟𝐟𝐨𝐫𝐭 put into a shop display 𝘢𝘤𝘵𝘶𝘢𝘭𝘭𝘺 influence sales? That's what Morales¹ set out to answer in 2005. Participants were shown round the same store, except half saw the shelves 𝐧𝐞𝐚𝐭𝐥𝐲 𝐬𝐭𝐚𝐜𝐤𝐞𝐝 𝐰𝐢𝐭𝐡 𝐡𝐢𝐠𝐡-𝐞𝐟𝐟𝐨𝐫𝐭 𝐝𝐢𝐬𝐩𝐥𝐚𝐲𝐬. The other participants saw the same products, but with a 𝐥𝐨𝐰-𝐞𝐟𝐟𝐨𝐫𝐭 𝐝𝐢𝐬𝐩𝐥𝐚𝐲. The results are striking. Those who saw the high-effort display were willing to pay 24.4% 𝒎𝒐𝒓𝒆. After seeing a store display like Boots, customers were willing to pay...

Concrete Phrases Read online Which electric bus would stick in your mind? It's not even a competition. Copy that's easy to visualise is easy to memorise. In 2021, Richard Shotton¹ showed participants a number of vague phrases, like 'innovative quality', and then some concrete phrases, e.g., 'money in your pocket'. Shotton’s concrete phrases were 8.6x more likely to be remembered. Richard Shotton's Concrete Phrases Study He’d proved the concrete phrases' effect, a phenomenon first discovered...

Psychology of Pricing Read online 1) Charm Pricing for High-Quality Products Imagine you’re buying a shatterproof iPhone case Does it matter if it is priced at £49.99 or £49.95? Well, yes. Apple uses charm pricing but usually ends prices with a 5. Gendall, Fox, and Wilton (1998)¹ ran an experiment with fast-moving consumer goods (fly spray, cheese) and durables (electric kettles). They found that prices with endings in 99 cents are more attractive for low-priced, fast-moving consumer goods...

Unit Asking Read online Which of these articles encouraged Brits to donate more? It's the one on the right. Research by Christopher Hsee¹ found that donors gave nearly twice as much when first asked to consider the needs of a single person before being asked to donate to a larger cause. This “unit asking” strategy made contributions feel more reasonable and personal. And it explains this² rather bizarre study: The study looked at the success rate of donation requests on the...