So the JC Penny’s effect is a phenomenon in consumer psychology where consumers react negatively to something even though it is better to them but it doesn’t feel better.
It is named after the store JC Penny’s who got rid of sales and instead lower prices to what they would be on sale all the time. This was better for the consumer but consumers liked sales so they hated it.
I remember someone talking about an airline that advertised very low prices up-front but then added tons of fees for every individual thing, and when adding all the fees up for the service you’d expect with any other airline the end price would be the same. However, given that all the services/fees are technically optional, this is actually an ideal pricing model since you don’t have to pay for any services you don’t want.
Exactly
So not an example of that effect then?
How so? I feel it is an example of the effect because customers are drawn in with a low price and are surprised by a plethora of seemingly-sneaky fees, which take up a large portion of the total bill. Customers feel negatively about the long list of fees and the implication that they’ve been tricked, but they wouldn’t think twice if the fees were just included in the base price. It is against their best interest to be automatically and opaquely charged for all regular services (i.e. normal airlines) instead of being transparently given the option to forego those that they do not care about (i.e., fee-based airline).
Ehhh i’m not sure I agree with you, I get what they’re saying. It’s not about being drawn in and pulling what’s borderline a bait and switch, it’s about literally not knowing that one deal is better than the other at face value with all info available. Deciphering fees and running through all that stuff is not the same thing. The 1/4 vs 1/3 pound burger is a much better example
It would be like me offering you 3 nickels or 1 quarter and you decide to pick 3 nickels because you don’t realize that 1 quarter is worth more than 3 nickels
Exactly.