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Price Comparison Could Make You Spend More Than Usual

Food For Thought: Comparing Prices Isn't Always Good

Sometimes, we think we're acting in our own best interests but are actually working against them. Do you ever compare prices on a restaurant menu, and think that you're acting favorably by ordering something that's not the most expensive entree on the menu? Of course. But your entree only seems reasonable because there's something else that costs more.

Behavioral economist Dan Ariely explains why it's important to know your budget before buying anything. He said, "When you open a menu at a restaurant, you may not realize that the prices you see affect what you're willing to pay. If the most expensive entrée is $45, you might decide $30 is an acceptable price. Should the restaurant add a $60 dish, you may be willing to pay $45. The same issue comes up when shopping for real estate. Letting a broker show you a house above the top of your range can be costly."

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MandyJoBo MandyJoBo 8 years
I just realized that I've been experiencing this and didn't realize it. I'm a member of a website that has sample sales for its members only. The prices are always amazing...compared to their retail price! Today, for example, the event that gave me my epiphany: Valentino lace sweater retails for $1980, marked down on this special "give limited items away cheap to get them circulated" website for $525, and I thought: Wow, good price. I'm getting it. Then I stopped myself and said: $525 for a SHIRT?!?!
JaimeLeah526 JaimeLeah526 8 years
I'd thought of this before. I compare prices to other comparable things not to other prices at the same place.
CaterpillarGirl CaterpillarGirl 8 years
I dont know about anyone else, but i never go anywhere new without researching it first because we are on a budget, and i would never get stuck at a place where the prices were that outrageous that i settled for something seemingly "cheaper" but it really wasnt!
CaterpillarGirl CaterpillarGirl 8 years
I dont know about anyone else, but i never go anywhere new without researching it first because we are on a budget, and i would never get stuck at a place where the prices were that outrageous that i settled for something seemingly "cheaper" but it really wasnt!
gabiushka gabiushka 8 years
Very interesting note, I will remember..
princessjaslew princessjaslew 8 years
that makes a lot of sense!
k_izzle k_izzle 8 years
Makes a lot of sense! I never thought about it like that before!
annebreal annebreal 8 years
That's so true! I don't get tricked by this with restaurants so much, because I know what my budget is, but when I'm shopping for something unfamiliar I really need to consult a friend about what's overpriced and what's reasonable. I try to take mental notes so hopefully I just know it myself from now on.
silly3 silly3 8 years
What a good point! Something that seems so obvious now, but I wouldn't have really thought about it.
RosaDilia RosaDilia 8 years
I do this all the time.
Shopaholichunny Shopaholichunny 8 years
Wow. This is sooo TRUE. I never really thought about it this way.
carhornsinapril carhornsinapril 8 years
i noticed this while shopping for mattresses with my fiance. needless to say, we went over-budget on our bed...
SkinnyMarie SkinnyMarie 8 years
My sister in-law played this trick on my brother going suite shopping. They started at some ridiculous place like Versace and my brother liked it a lot until he saw the price, so then they went to Kenneth Cole and somehow it was ok because it was less then the other one, but still overpriced.
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