Crossing State Lines Is No Easy Jaunt for Insurers and Local Regulators - WSJInsurance executives question how much interstate sales would unleash competition. Premiums are closely tied to underlying costs, such as rates paid to local doctors and hospitals and projected health needs of enrollees. The regulatory environment notwithstanding, selling coverage in any given state would require an insurer to have a local network of allied doctors and hospitals, something new entrants to a market might find costly to arrange. “In order to offer more value, you will need to have relationships and contracts with the providers in a state,” said Paul Markovich, chief executive of Blue Shield of California. Insurers almost certainly wouldn’t sell coverage at the same price in multiple states, said Jim O’Connor, a principal at consultants Milliman Inc. They would adjust rates to reflect costs in each location, even if all the policies were under the same regulatory regime, he said.
Art and pricingVery low prices made participants like art less, very high prices made them like art more.
Even with a joke, anchoring moves an offer up 10%As expected, participants did anchor on the first number presented during the salary negotiation — even when that number was intended as a joke. When the bidding started off with the mention of $100,000 the average offer was $35,385 compared to an offer of $32,463 for the control group. That is, the high salary joke actually paid off with an extra $3,000 a year.
The Endless, and Expensive, Quest for Rare ObjectsRarity isn’t all about social signalling, though. Pappy’s rarity also makes the bourbon taste better, since people often consume rare products in an especially deliberate way. Precisely because they know rare experiences are scarce, they slow down and savor them, revealing layers of pleasure that might go unnoticed otherwise. After I spoke at the conference in Chicago, the organizer handed me a glass containing two ounces of Pappy twenty-year, and I sat alone in a corner and sipped the bourbon very slowly. Inspired by its rarity, I extracted extra pleasure from a mundane act that I’ve performed many times before. It helped, obviously, that the bourbon was excellent to begin with, but who knows—by savoring a lesser bourbon, I might have increased its value, too. Rarity isn’t essential to savoring, but it does nudge you toward mindfulness when you might otherwise consume mindlessly.
Same number looks different, depending on the trendMaglio says the lesson here for marketers or brand managers is they may want, where possible, to focus on the message that a product or an event is on an upward trend. But if you're in the not-so-desirable position of talking about something in decline, the best approach may be to focus on only the most recent estimate and not its downward trend or to assure consumers that the trend is not meaningful.
runDisney, Can We Talk? | Sharp EnduranceI would like to discuss in particular the starting cost of the half marathon at $205. Clearly, you know this is crazy. Marathons around the country with larger fields in bigger cities don’t even have pricing that gets that high. And if they do, it’s double the distance (and honestly more swag too). That is literally almost $16 per mile. Also let me remind you, literally a third of Disneyland Park is under construction as you build Star Wars Land (which I also protest but I’ll save that). So, you raise prices…while you’re under construction…makes sense. $120 for a 10K is MAD. and $80 for a 5K is laughable. Let’s not forget to add the Active processing fees as well, so go ahead and add about 5-15 bucks on top of registration. And I am not even going to talk about the expo lines the first day of the race weekend. Child.
Psychology of Pricing: A Gigantic List of StrategiesNot only should you start with a high initial price, but you should also use a precise value. In one study, Janiszewski and Uy (2008) asked participants to estimate the actual price of a plasma TV based on the suggested retail price — either $4,998, $5,000, or $5,012. When participants were given precise values ($4,998 and $5,012), they estimated the TV’s actual price to be closer to that range. When the suggested price was rounded ($5,000), participants believed the actual price to be much lower.
Bezos: books need to competeThe most important thing to observe is that books don’t just compete against books. Books compete against people reading blogs and news articles and playing video games and watching TV and going to see movies.Books are the competitive set for leisure time. It takes many hours to read a book. It’s a big commitment. If you narrow your field of view and only think about books competing against books, you make really bad decisions. What we really have to do, if we want a healthy culture of long-form reading, is to make books more accessible.
The economics behind 432 Park AvenueKeep in mind that these are pied-a-terres that begin at $7 million each and include several full-floor parcels in the $75 million range. More than anything else, this speaks to the insatiable appetite of the world’s greatly expanded billionaire class. Middle Eastern oil magnates, Chinese billionaires, Russian oligarchs, and the Latin American aristocracy all have one thing in common: More money than they know what to do with and a desperation to get as much of it out of their home countries as possible. New York real estate works very well as both a facilitator of this as well as a store of value.
Pricing for Serial podcast adsMailChimp, the email marketing company that sponsors “Serial,” says it pays between $25 to $40 CPM (the cost of reaching a thousand listeners). On average, pre-roll ads on YouTube cost an average $17 CPM, according to data firm SQAD.
Amazon offends the elite by flooding their marketDespite my benefitting from it, I am unwilling to pretend that this system is beneficial for readers or for writers who lack my privilege. […]The reason my fellow elites hate Amazon is that Amazon refuses to flatter our pretensions. In my tribe, this is a crime more heinous even than eating one’s salad with one’s dessert fork.The threat Amazon poses to our collective self-regard is the usual American one: The market is optimized for availability rather than respect. […] If Amazon gets its way, saying, “I published a book” will generate no more cultural capital than saying “I spoke into a microphone.”
Traditional publisher pricing model kills conversationReading is especially important when a book comes along and synchronizes public conversation; the publishers’ preferred pricing model—wait a year for the cheap copy—means that people who can only afford the paperback can’t be part of that conversation.
Visible Prices is the tool that I wished for to help students grasp the economic content of literature, and to provide researchers with a means of studying how authors used prices in their texts. In Charlotte Bronte’s Jane Eyre, Jane’s salary as governess to Mr. Rochester’s ward is £30 per annum. This database makes price back into a visible part of the reading experience by allowing students to discover what £30 meant in purchasing power, or to see how the salary that Bronte chose compared with those being offered at the time of composition and publication. Economic historians have, in the past, gathered price listings for staple goods and raw materials, such as wool and wheat. These records of the changing prices of a specific commodity have been formatted as excel spreadsheets, or as .txt files. They are readable, but not manipulatable, and are able only to track specifically focused inquiries, i.e. “What was the price of wheat recorded in France from 1825-1913?”. As printed documents have migrated onto the web, researchers have gained greater access to economic data, though the challenges of making it easy to combine and manipulate remain.
If a reader waiting for my latest release (who was willing to pay $4.99) suddenly gets it for 99c, they now have $4 more to spend on books. So maybe they’ll end up buying two or three instead of one. Also, while I might leave money on the table this week, the strategy is to maximize sales by getting more of my disparate list/platform to try my historical fiction. If it works, I’ll have expanded my readership and made money. If it doesn’t… the worst that will happen is I’ll make a little less money, but still expand my readership somewhat and make existing readers happy. But however it works out for me personally I don’t see it having much effect on anyone else, other than somewhat increasing the amount of books my readers can afford.
Brad Stone describes one campaign to pressure the most vulnerable publishers for better terms: internally, it was known as the Gazelle Project, after Bezos suggested “that Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle.” (Company lawyers later changed the name to the Small Publisher Negotiation Program.)
Avastin, which it turns out seems unlikely to significantly improve the health of more than a relative handful of patients, had $6 billion in global sales in 2012. Avastin and Zaltrap must be administered intravenously in a medical setting. Cancer treatment centers and physician groups purchase drugs at a price set by the manufacturer and then seek reimbursement from payers at a higher price—a practice called “buy and bill.” The spread, or “cost recovery,” between the acquisition price and the reimbursement price drives revenues.
Purple pricing works like this Start with limited number of units to sell or set a time after which the product has no value Start with a set high price and periodically drop the price Anyone who buys the product at a given price is guaranteed they will only have to pay the lowest price the last unit is sold for So if you like the product at a given price you should pay. You may not have liked it at $2.99 but when it drops to $1.99 you might find it attractive. You should agree to pay that price. The scheme guarantees you will not pay more than the lowest price someone else who buys the product after you pays. If the last price is $0.39, that is the price you will pay even if you bought in at $2.99. So it does not suffer from sideline or fairness issue.