“Any time you have to estimate a numerical value, it turns out you’re very susceptible to the power of suggestion,” says William Poundstone, author of the new book Priceless: The Myth of Fair Value (and How to Take Advantage of It). “Any related value that you hear just before you make your estimate really does have this big statistical impact on what number you’re going to estimate.”
In other words, at the moment Jobs says, “The pundits think we’re going to price it at under $1000,” this plants a seed in your mind: an iPad costs something like $1000. When he reveals the real price, you feel like you’ve just saved $500. If he said, “We were thinking of pricing it at $399, but we decided to go for $499,” that would feel like a ripoff—even though absolutely nothing has changed.
read the article at mint.com