Ah, the psychology of pricing…. It’s common knowledge that $9.99 is perceived as way cheaper than $10. But is it?

Here’s some study from Cornell University that shines a new light on the psychology of pricing: ‘Contrary to expectations, guests given the numeral-only menu spent significantly more than those who received a menu with prices showing a dollar sign or those whose menus had prices written out in words.’.

Another source tells ‘Menu prices with decimals seem to confuse’. Disclaimer: the site, ‘Stuff White People like’ is somewhat humorous; but to the point, nonetheless!

Here’s my take:

- If price is an integral part of the value, i.e. people buy it because it’s cheap, then price shall be prominent. So, no rounding, big dollar sign:

Fast food sandwich: $5.95

- If the good is purchase despite its price, then make the price non-attention grabbing as possible:

Truffle Linguine: 36

By the way, the extreme situation of some luxury goods not even displaying price is still another approach… By surprisingly not showing price, they make it a big part of the Veblen good!

In any case, do not make the price tag more elaborate that it should be, because it makes the whole purchasing decision more complicated: Truffle Linguine - thirty six? No thanks.

As one can see from Compete.com, the traffic on our Video Games Classifieds site seems to follow a steep, expert-only ski slope since its (modest) March summit.

Catastrophe, desolation, nervous breakdown? Not really!

I don’t know how they compute their stats, but can tell you that, unlike what it shows, we have way more traffic than in December for instance (which is quite logic in a way, VALU VALU was not even publicly available, then!)

But mostly, we created VALU VALU last year to bring ‘Scientific Pricing to the People’. All Pricing, and only Pricing. The video games classifieds site allowed us to fine-tune and proof our Pricing Engine.

VALU VALU is now ready to move to the second phase. One step closer, much closer, to ‘Scientific Pricing for the People’.

The next phase product is coming in a couple of weeks, stay tuned!

Toronto-based, self-funded Freshbooks offers something ‘boring’ but pretty useful for small businesses: a web-based invoicing system.

They’re not exactly the only ones to provide such services, but it seems pretty well done.
Now they’re adding the ability to hire ’subcontractors’, to whom one can forward some work.

These subcontractors have only access to a subset of the client info, and the whole sub-invoicing process is, obviously, handled by FreshBooks.

The recession of 2008 may be remembered later as ‘FAIL of the big corporations’. There’s a long-term trend toward small entrepreneurship and agile companies. Amongst multiple causes are the disappearance of lifetime employment, the automation of the usual business core (Freshbooks is an example), and a natural selection process against corporate inefficiencies.

Proof: 26% of US workers are already freelancers (source CNN Money).

Next step: who will create a full ‘virtual company’ service?

A website to do everything in a few clicks, from incorporation to bookkeeping, and some simple marketing. Like a Facebook relies upon ‘Facebook Apps’ to offer additional features, there could be a bunch of third party plug-ins to synchronize and automate everything: bookkeeping of Google AdWord expenses, ensuring subcontractors are insured, etc…

The opportunity is gigantic. But that would probably require significant funding to build something comprehensive enough…

Are robots necessary evil on Twitter? Let’s hope not, as we just release an automated Twitter feed, @ValuValu.

Instead of relying exclusively on manual tweets, we decided to do it the ‘VALU VALU’ way, that is: to automate as much as possible.

Items recently made available and top movers (that is, products going up or down) will be automatically pushed to Twitter, along with their URL.

Fear not: We’re limiting the frequency of updates!

Songs’ popularity drives their price up.

Told you: soon, all prices will be dynamic

Repeat after me: soon, ALL prices will be dynamic

(via Engadget)

It’s been a while since the last Definition! Here’s one: