A review of William Poundstone’s Priceless: The Myth Of Fair Value.
Some nerve asking 27 bucks for this book. Actually it’s $26.99. Oh wait, Amazon tells me that it’s now $10.80. My god! I could save $16.19 just by buying this book. I’ll buy a million and make a fortune! Wait… I’m confused. And so are you.
I thought this book was a brilliant and critical instruction manual to one of the most important aspects of modern life. First, everything you learned in economics class is demonstrated to be flagrantly wrong. Prices do not reflect some kind of supply/demand curve intersection. Prices are more random. More magical. More predatory. And it is the human brain that is the exploited weakness.
Poundstone’s writing, to me, is quite good. I found him literate and well-organized. The pacing is good and the research is thorough. Indeed, my biggest complaint about the book is that I have already read about many of the interesting studies he cites. This does not diminish the effect since everything he cites is a bona fide interesting case.
As I read this book I kept thinking, ok I’m smarter than this, I’m not part of this irrationality. But the inescapable conclusion is that you are. Prices are hard to deal with sensibly using all available information. Our minds are designed for short cut heuristics that mostly work, but which can be exploited. You can minimize the problem but vigilance is required.
My hope is that the author and publisher didn’t waste the delicious opportunity to play some price games with the book itself. What would the difference be between a market with a $40 cover price discounted to $10 vs. a market where the book was just priced $10? Can the author prove some money was earned by choosing a better cover illustration? Etc. I hope to see a new chapter in the next edition! Which I will get from the same supplier as I got this edition, the library.