Dec 9, 2013

The Pain of Cutting Prices to Move Stale Inventory

I like having money to spend. I try not to spend it, but just having money and knowing that I could spend it if I wanted to feels good to me. I don’t think that I’m alone in feeling this way, either. Money affects people in physical ways and I recently stumbled onto proof that this is true.

In 2009, Kathleen Vohs of the University of Minnesota conducted an experiment disguised as a “dexterity study.” In the study, she had one group of students count a stack of $100 bills while another group counted a similar-sized stack of blank pieces of paper. Then, both groups of students stuck their fingers into very hot water. The students who counted the real money reported feeling significantly less pain from the hot water than the students who didn’t handle the money.

The effect was so pronounced that Ms. Vohs tried the experiment in reverse: She asked some subjects to make of list of their monthly expenses and another group to write about the weather. The group who listed their bills felt more pain from the hot water than the group that wrote about the weather. Read More

No comments:

Post a Comment