#2 The Cost of Things: How Price Point Impacts What We Buy Part 2 of 8
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The psychology behind why we purchase certain items
Psychologists have long been interested in understanding what influences our decisions to purchase certain items. Price is one important factor that can impact our purchase decisions. For example, a study by Cornwell and Ritti (1992) found that people were more likely to purchase a product when it was displayed with a higher price. This finding has been replicated in other studies (e.g., Lee & Parkinson, 2003). So why does price have this influence on our purchasing decisions? One explanation is that higher prices evoke a sense of prestige or status. In other words, we view items that are priced higher as being more valuable or worth our money. This explanation is supported by research showing that people are more likely to purchase items that are priced higher when they are looking to impress others (e.g., Grewal, Kardes, & Lichtenstein, 1992). Another explanation for why price impacts our purchase decisions is that it serves as a cue for quality. That is, we tend to believe that items that are priced higher are of better quality than those that are priced lower. This explanation is supported by research showing that people are more likely to purchase items that are priced higher when they are looking for quality over quantity (e.g., Dickson, Smith, & Gong, 2002). So, price can impact our purchase decisions in a number of ways. It can signal prestige or status, and it can cue us in to the quality of an item. Keep these psychological principles in mind the next time you are out shopping!
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