Next time you're shopping for a big-ticket item, or even a very-small-ticket afterthought, break down what you're paying in smaller numbers. Because, researchers suggest, your brain probably can't do it by itself. Anyone who's ever thought about why car dealers price everything to end in a string of nines knows that the brain can pull tricks on your wallet. Ohio State University researchers found, however, that test subjects were led astray by seemingly first-grade differences in price description. In a study model that rewarded subjects for deserting the person they were teamed up with, the offers with more numbers won out more than the same exact amount put more plainly:
When the reward for cooperation was increased to 300 cents from 3 cents, the researchers found, the level of cooperation went up. But when the reward went from 3 cents to $3, it did not.
You'd have to hit the link to get a full read on the study. The long and short of it is, though, that "people tend to overestimate differences between small quantities and underestimate differences between large ones." That's food for thought the next time you're looking through a value menu, or pricing out a flat-panel TV.