The real link between quality and price is inside our heads.

Why setting value by payment is messing with your mind

Today, I stumbled upon an amazing podcast episode of “Social Triggers” where the host, Derek Halpern, talks to Francesca Gino (, a Harvard Business School professor and author of the book “Sidetracked”, about why people only trust information with a price-tag. More information on the podcast episode can be found at the bottom of this page.

I captured some of the highlights from this conversation and plotted them down below, so you would not have to listen to the entire podcast episode in case you are only interested in the key takeaways — also summarized at the bottom of this page.

Advice with a price-tag

The more you pay for advice, the more you will accept it, the more you will actually do something with it. When advice is provided to us for free, we automatically question the value of it, even though the quality could be even better than the advice we paid for. People also tend to “respect” the information which they paid for.

The $100.000 survey scam

Another great example is when you need to perform/set up a certain survey for a company. Their advice is for you to involve a specific third-party which could deliver you with the results, costing about $100.000. If you would find a more clever way, say through another third-party which could save them a huuuuge amount of money, the company is likely to go with the party that costs them $100.000 because the results will have more weight when distributing them afterwards. Again, the company thinks the results will be of higher quality because the price-tag is higher.

The gym-story

Simply paying for something has an amazing psychological effect which can actually make us “do something” which we otherwise wouldn’t do. A great example which Derek Halpern presented from his personal life, will most definitely align you with my previous statement.

I used to live in a building which had a gym at the ground floor which I obviously passed by every day, twice. Although, I really wanted to go to the gym, I always came up with “some” excuse not to go. Finally, I took the decision of dragging myself (and all my courage with me) into the gym, walking to the reception desk, talking to one of the personal trainers and bought me 30 gym lessons …

The most important change from that point forward is that Derek felt obliged to go to the gym, just “because” he paid for the lessons. The upcoming 30 lessons now gained additional value from his perspective since he paid a certain amount of money for it.

Environmental factors

One of the most amazing things I like to do (since I’m a huge fan of Robert Cialdini’s work) is investigating how changing small environmental factors could have a tremendous impact on how people think/react. A small change, a positive unexpected surprise, could provoke a huge positive reaction.

Imagine you’re meeting with and old friend which you only see twice a year — let’s call him “Frank”. You need a favor from Frank, since his brother has a construction company which you really want to do a business deal with. What Frank is expecting, is to have a chat with you, some boring business talk and you trying to convince him all night long to put in a good word for you. Something Frank is most likely not expecting is you, bringing/giving him a (business) book as a present which you think he will find interesting. It will make him feel impressed, joyful and you probably have more chance on having a successful “put-in-a-good-word-for-me” evening with Frank.

Unfortunately, this also works the other way around.

Picture this manager of yours, driving his car to work, while being stuck in traffic. This is causing him to be late at the 9 am board meeting. During this meeting, he is supposed to make certain important decisions which he carefully prepared the day before. One of the environmental factors — becoming frustrated because of the traffic jam — will (in)directly influence his predefined decisions even though he made preparations, once he steps into the office, too late.

Key takeaways

Don’t overvalue information or objects purely based on their price-tag.
The power of payment increases value of the information/object, not its quality.
Surprises influence and affect the behavior of people — in a good and/or bad way.

Podcast information:

Social Triggers Insider with Derek Halpern
“The psychological reason why you should sell what you know”

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