Lars Lofgren wrote a very good piece on QuickSprout about the psychology of pricing. The article is very much worth a read for those selling names both actively and passively.
While a lot of the techniques are geared more to a tangible product, it still provides some solid insight for domain investors.
From the article:
Price Vs. Value
Is price a measure of value? Not necessarily, says a study conducted in 2008 by Goldstein and team. The study found that people “do not derive more enjoyment from more expensive wine” when they don’t know much the wine cost. According to another study, however, there is a clear correlation between price and perceived value. When participants were told that a wine had a high price, participants gave that wine higher ratings.
The study took its analysis a step further by examining actual neurological responses to this wine tasting activity.
When told that a wine was more expensive, study participants experienced higher activation in the brain regions associated with feelings of pleasantness. To some extent, consumers are letting price influence how they feel about products and services.
“Reality is what we take to be true,” pioneering physicist David Bohm asserted in 1977. “What we take to be true is what we believe. What we believe is based upon our perceptions. What we perceive depends on what we look for. What we look for depends on what we think. What we think depends on what we perceive. What we perceive determines what we believe. What we believe determines what we take to be true. What we take to be true is our reality.”
Only that’s the life of the person who doesn’t believe in Truth through Science.
In microeconomics it is called the snob effect, that is, why people do not always behave rationally. Why they behave against their own interest. You can’t do macroeconomics without these assertions. No math. You can’t predict. But hey, nobody ever lost money underestimating Americans or Scandinavians.
https://www.facebook.com/watch/?v=302844293880712
When others decide what have value. There is still facts.
the problem is:
domains are not tasty
they do not taste better when more expensive
they will sell high
when in regard to the expected gain for the buyer
the prize is still very low