Podcast Summary: Nudge – "Learn psychological pricing in 24 minutes"

Host: Phill Agnew
Guest: Dr. Markus Huseman-Kopetsky
Date: April 6, 2026

Episode Overview

In this episode, Phill Agnew teams up with pricing expert Dr. Markus Huseman-Kopetsky to unpack eight key psychological pricing tactics, all grounded in science. Drawing from landmark studies and practical experiments, they offer actionable advice for marketers, entrepreneurs, and anyone setting or negotiating prices. The discussion covers everything from anchoring with unrelated high prices, to optimal ways of presenting bundles, discounts, and even how to communicate unavoidable price rises.

Key Insights & Discussion Points

1. Incidental High Prices as Anchors

• Concept: Placing higher, even unrelated, prices nearby can increase a customer’s willingness to pay for your product.
• Example: A cafe displaying £50 artwork beside a £3 cake.
• Study: Booth selling CDs with a t-shirt stand next door. T-shirt price alternated between $20 and $80; customers' willingness to pay for the CD increased with the higher t-shirt price.
• Markus (02:37):

  "They anchor a reasonably higher price and they serve as a reference price for your current product. ... This is completely crazy. It was just a random number. That does not make any difference, but it still works."

• Timestamps:
  • [02:06] – Introduction of the incidental pricing effect
  • [03:46] – Nuanced discussion and study description

2. The Anchoring Effect & Concrete Examples

• Concept: Anchoring shifts perceptions even if the anchor is arbitrary.
• Key Study: Tversky & Kahneman (1970s) – Spinning a wheel before guessing % of African countries in UN; the anchor number influenced all guesses.
• Application: Start menus with the highest-priced items to set a “high anchor”—increasing average spend.
• Phill (04:34):

  "When the menu started with the most expensive item so they saw that item first, revenue increased by 4%."

• Timestamps:
  • [04:34] – Recap and explanation of anchoring
  • [05:50] – Application to restaurant menus

3. Precision vs. Rounded Numbers in Pricing & Negotiation

• Concept: Setting a precise initial price (like £799,800 vs. £800,000) signals thoughtfulness and discourages aggressive haggling.
• Markus (06:39):

  "If you make an offer that is precise, the counteroffer will deviate less from this initial offer compared to a round offer at the very beginning."

• Studies:
  • 2008 paper shows precise prices led to ~1.9% haggled off, versus 6% for rounded prices.
  • Rounded offers increase acceptance likelihood—good for closing deals.
• Timestamps:
  • [06:39] – Discussion of precision anchoring
  • [08:31] – The trade-off between precision (for negotiation) and rounding (for closure)

4. Anchoring Works on Experts Too

• Study: Appraisal value experiments with real estate professionals proved even experts are influenced by initial (anchored) prices.
• Markus (09:15):

  "If you give it to experts like real estate brokers ... the initial listing price has statistically significant effect on what even experts say."

5. Concrete Competitor Comparisons

• Concept: Be specific when comparing your price to competitors—name names and use recent, verifiable prices.
• Markus (10:43):

  "You need to be very concrete. And in this case you name the concrete competitor... This helps to build the reference point of your competitors prices."

• Application:
  • "Trail finder's all inclusive Norwegian cruise price is £1,800. Our price ... is £1,600." outperforms "seen elsewhere for £1,800."
• Timestamps:
  • [10:43] – How and when to make competitor comparisons
  • [12:03] – Real-world example

6. Product Bundling & Unbundling Outstanding Features

• Concept: If your bundle contains an outstanding component, unbundle it to highlight value.
• Example: Airline with top-tier entertainment—showcase this separately from the general bundle.
• Markus (13:23):

  "If you split it out, you make customers evaluate each of these components more closely. ... you draw more attention to this outstanding attribute."

• Timestamps:
  • [13:23] – Bundling vs. unbundling experiments
  • [14:29] – Application advice

7. Multi-Unit Pricing Frames Buy Quantity

• Concept: Framing promotions as “6 for £3” (vs. 50p each) increases both sales volume and number of units purchased.
• Studies: Multi-unit framing led to a 32% boost in sales in a 1998 experiment.
• Reason: The bundle size acts as a quantity anchor for indecisive shoppers.
• Markus (15:31):

  "The six units serve as an anchor for the quantity of units customers buy. And they anchor their buying decision on the six units."

• Timestamps:
  • [14:45] – Application to soft drink multipacks
  • [15:08] – Empirical findings

8. Novelty in Discount Framing

• Concept: Use “novel” formulations for a discount to enhance consumer engagement and perceived value.
• Examples:
  • In the US/UK, instead of “30% off,” say “Pay only 70%.”
  • In Hong Kong, the inverse may be novel.
• Markus (16:49):

  "This novel discount draws attention and makes us human beings think a bit more about this discount. ... As soon as we put more thoughts and attention on a deal, it increases in attractiveness and perceived savings."

• Timestamps:
  • [16:49] – Cultural context and psychological basis
  • [17:57] – Practical guidance

9. Raising Prices Without Alienating Customers

• Concept: When price increases are needed, (1) provide explicit, concrete justifications ("due to supplier and transport costs"), and (2) change product configurations to blur direct comparison.
• Study: Even fair, inflation-matched rises were seen as “too high” by 30% of customers.
• Markus (19:21):

  "If subscription companies raise prices, they have actually two, two levers to pull. First is the explanation ... Second, ... you can make the link between the service enterprise less salient so you can actually break it."

• Example: Netflix offering new, cheaper (ad-supported) tier alongside a price hike.
• Timestamps:
  • [19:21] – Justifying increases & tweaking configurations
  • [20:42] – Netflix as a case study

Notable Quotes

• Markus (03:46):

  "It was just a random number. That does not make any difference, but it still works."

• Phill (04:34):

  "Anchor your price with a high priced alternative. It doesn't even have to be a related product."

• Markus (06:39):

  "Precise numbers also carry connotation. ... If you make an offer that is precise, the counteroffer will deviate less from this initial offer compared to a round offer at the very beginning."

• Markus (13:23):

  "If you split it out, you make customers evaluate each of these components more closely."

• Markus (16:49):

  "Novel discounts increase the likelihood to buy and people perceive the value they receive as much better."

• Markus (19:21):

  "Cost increases are always other reasons that are perceived as the fairest across all customers. ... you can make the link between the service enterprise less salient so you can actually break it."

Bonus Tips (Mentioned, Details in Bonus Episode)

• How to name your product to increase sales
• How to describe your product to make it more alluring
• How changing a single word increased willingness to pay for lemonade by 81%

Find these by accessing the bonus episode via the show notes or newsletter link.

Conclusion

The episode delivers a research-backed, real-world toolkit for optimizing your pricing by applying psychological principles:

• Use high anchors—even unrelated ones.
• Start negotiations with precise numbers.
• Compare prices with explicit, concrete competitor references.
• Unbundle standout components for added value.
• Present discounts and bundles in customer-anchoring ways.
• Communicate price rises transparently and thoughtfully.

Whether pricing your own products or decoding retailer tactics, this episode is full of actionable, science-backed strategies you can use today.

Listen for a deeper dive:
For listeners, all studies and bonus content are available via links in the show notes or newsletter. The episode keeps the tone punchy, practical, and jargon-free—true to the Nudge podcast’s brand.