Richard Thaler's transaction utility concept shows that people's willingness to pay for a good depends partly on how much they think the seller's costs are, not just on the utility of the good itself; when the same beer is sold from a luxury hotel vs. a shack, people will pay more despite identical utility.
factualpending
Speaker
Rory SutherlandEvidence Quote
“your friend says to you, "I'm off to blank to buy a beer. Tell me what the maximum amount you're happy to pay for a beer is... one situation he says there is a boutique hotel selling chilled beer and in the other situation he says there's a shack selling cold beer and your price changes”
Source
Marketing Expert: The Playbook Behind Every Great Campaign | Rory Sutherland— The Knowledge Project PodcastCreated: 8/10/2026, 11:32:46 PM
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