The Paradox of Market Street
Week 1 Challenge | Deadline: Next Monday
“In the bustling city of Behavoria, on the famous Market Street, a peculiar experiment is taking place…”
The Scenario
Three shops opened on Market Street, each selling identical coffee mugs:
- 🏪 Shop A: Sells mugs for $10
- 🏪 Shop B: Initially sells mugs for $20, then offers a “50% discount”
- 🏪 Shop C: Gives a free mug with every $15 purchase of anything else
The Mystery
After one month, these were the results:
- One shop sold 500 mugs
- Another sold 100 mugs
- The third sold 300 mugs
Your Challenge:
- Match each shop with its sales volume
- Explain the psychological principles behind the results
- Identify at least three cognitive biases at play
Additional Clues:
- All mugs are identical in quality and appearance
- The shops are equally accessible to customers
- Each customer bought exactly one mug
- Marketing budgets were identical
Submit Your Answer:
Thinking Points:
- How does the framing of price affect perceived value?
- What role does “free” play in decision making?
- How do reference points influence purchasing decisions?
- What’s the impact of perceived savings vs. actual cost?