Some fascinating research on pricing different options.

Jeffrey Kearney, one of the Mentors at ViRTUS, send me the link to this TED talk the other day. It’s a relatively short video of behavioral economist Dan Ariely, the author of Predictably Irrational, discussing his own counter intuitive (and sometimes shocking) research findings on how we make choices between competing options.

I was shocked by some of his finding and what they mean for the practicality of pricing options.  Subtle changes in how different options are priced relative to each other can lead to some drastic differences in the way people make their buying choices.

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