Behavioural study is too dry for its own good

Non-fiction: Misbehaving: The Making of Behavioural Economics. By Richard H Thaler. Allen Lane, €26.60. Reviewed by Brendan Daly

16th May, 2015
Behavioural study is too dry for its own good
JC Penney: the US store misread buyer psychology and lost sales by rounding up items to the nearest dollar

In 2012, the chief executive of the US department store chain JC Penney announced that he was ending “fake prices”. All products ending in .99 – the mythical suggested retail price – would be rounded up to the nearest dollar.

The decision was a disaster: JC Penney’s sales and stock price plummeted. Although customers were scarcely paying more, they were losing out on the pleasure of paying less than the suggested retail price – say,...

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