Psychology of Pricing Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Psychology of Pricing flashcards as text
A CPP candidate evaluates a price communication strategy. Which font and number style would most reduce perceived expensiveness of a menu price?
Answer: $24 in small, elegant script without a dollar sign
Research shows that removing currency symbols, trailing zeros, and using smaller or elegant fonts reduces the salience of price and lowers perceived expensiveness.
A consumer buys a coat for $300 but feels fine spending $30 on a hat the same day. From a mental accounting perspective, this most likely occurs because:
Answer: The hat represents a separate mental account with a lower budget ceiling
Mental accounting places different expenditures in separate 'budget buckets,' so the hat is evaluated against a clothing sub-account, not the total day's spending.
In a negotiation context, the party that makes the first offer typically:
Answer: Sets a powerful anchor that biases the final settlement toward their number
Extensive research shows that first offers create anchors that pull the final settlement toward the initial number, giving the first mover a significant advantage.
A 'buy 2, get 1 free' offer versus '33% off' delivers identical economic value. Which is typically more effective and why?
Answer: Buy 2 get 1 free, because it frames the benefit as a gain of something extra rather than a price reduction
Getting a free item is psychologically more attractive than an equivalent percentage discount because gains feel like 'found money,' reducing loss aversion.
Hyperbolic discounting in consumer behavior most directly implies that:
Answer: Consumers heavily discount near-term costs but are relatively insensitive to far-future costs
Hyperbolic discounters are disproportionately impatient about near-term tradeoffs but relatively patient about distant future tradeoffs, making 'pay later' offers especially appealing.
A CPP professional designing a price increase communication should avoid which of the following based on behavioral pricing research?
Answer: Presenting the increase as a percentage rather than an absolute dollar amount when the dollar figure is large
When absolute dollar amounts are large, expressing increases as percentages makes them feel larger; framing as a small absolute addition to a high base is psychologically gentler.
Which behavioral concept explains why consumers who participate in a 'name your own price' mechanism often pay more than a retailer-set discounted price?
Answer: The commitment and consistency principle reinforcing their stated value
Once consumers name a price, they are psychologically committed to that valuation; consistency pressure makes them feel obligated to follow through and even defend that figure.