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The Psychology of Price
The book in one sentence
Customers don’t judge prices logically against costs, so the businesses that price best are the ones that understand how people actually perceive value.
Who it's for
Founders and small business owners setting prices for the first time, marketers and product managers, and anyone who still prices by adding a margin to cost or copying a competitor.
The big idea
Caldwell, an economist working in behavioural economics, argues that price is not just a number attached to a product. It is a signal that shapes how customers see the product, whether they think it is good quality and whether it fits their idea of themselves. Because buyers rely on mental shortcuts rather than careful calculation, the same product can sell well or badly depending on how its price is set and presented. Understanding those shortcuts lets a business charge fairly for the value it creates and capture more of it.
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