Why Rory Sutherland has a £3.99 headache | Nudge Newsletter


Veblen Effect

Read online


Last week, I wrote about how Blue-Emu successfully sells pain relief cream (that doesn't actually cure pain).

It indicated that perception trumps reality and reminded me of this study 👇

Rory Sutherland described this eloquently in a recent talk, saying:

“I don’t have a $0.79 headache—I’ve got a $3.99 headache!”

It's not just painkillers that benefit from higher prices. Eco-products do too.

Research¹ cited in the brilliant Science Says measured sales of sustainable products.

Over six tests, the two researchers found that:

  • Eco-friendly backpacks were seen as 7.8% more eco-friendly when priced higher.
  • Lower-priced backpacks were seen as 8.3% less eco-friendly.

In addition, participants estimated that an eco-friendly detergent would cost 42% more than a non-eco equivalent.

There's a perceived link with price and effectiveness.

For painkillers, an expensive drug seems more potent.

For sustainable brands, an expensive bag seems more eco-friendly.

Sometimes it pays to charge more.

Enjoyed today's newsletter? Reply and let me know. — Phill

P.S. You can read all previous newsletters here.

¹Kumbargeri, A., & Tripathi, S. (April, 2025). Price green inference: The role of green= higher production cost lay belief. Journal of Business Research

Science says: low priced products seem less sustainable

As a behavioural science practitioner, I believe in the peak-end rule.

Tune into Nudge | Advertise with Nudge | Unsubscribe

Nudge Newsletter

I spend 18 hours each week turning marketing psychology into readable newsletters.

Read more from Nudge Newsletter

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...