Price Illusion:

Definition:

Price illusion refers to the phenomenon where individuals perceive changes in prices differently based on various contextual factors rather than on absolute value.

Subtitles:

  1. Contextual Perception:

    2. Price illusion is heavily influenced by contextual factors such as the presence of sales or discounts, comparison with previous prices, and the general pricing environment.

  2. Relative Price Perception:

    3. Consumers often compare prices of products with similar alternatives available in the market, resulting in the perception of a product as cheaper or expensive relative to these alternatives.

  3. Psychological Anchoring:

    4. Price perception can be anchored by initial reference points or suggested retail prices, leading consumers to judge prices as fair or unfair based on these anchors.

  4. Price Presentation:

    5. The visual presentation of prices, including the use of formatting, font size, and discounts, can influence how individuals perceive the value and attractiveness of a product or service.

  5. Temporal Perception:

    6. Consumers may perceive prices as lower or higher based on the timing of their purchase, such as during sales events or seasonal promotions.