Second-Cheapest Syndrome
Tuesday, September 30th, 2008Useful to know the next time to you eat out.
Ever order the second-cheapest wine on the menu while dining out? You don’t want to spend very much, but you also don’t want to look like a cheapskate ordering the cheapest bottle on the whole menu. Well, one in four diners do (in the UK, at least). In the marketing world, we can define this as a choice set effect with respect to reference pricing—using the cheapest bottle of wine as a standard of comparison against which the other wines are compared.
But did you know that the second-cheapest bottle is usually the worst value?
