After our last article on this subject, alert reader Liam pointed out that it might be harder to find an example when buyers are NOT behavioral and behave completely rationally during their purchases. This is quite true, so we thought we’d keep this entry short and show a good example of a company who has understood how people act and think. This company is, appropriately, the Economist.
Dan Ariely pointed out that the Economist had an odd pricing structure on its website. Its options were:
- Subscribe to a full year of online access to The Economist for $59.
- Subscribe to a full year of the print edition of The Economist in print for $125.
- Subscribe to a full year of both the online print editions of The Economist for $125.
Now, if you were to come across this you might think they hadn’t put much thought into it at all, right. More importantly, however, if a magazine you enjoyed had this pricing structure, which option would you choose? Well, since online access costs $59 and the print edition costs $125, the smart money would decide to purchase both, where the entire cost of online access is done away with, right?
Now let’s assume the Economist earns more with the print edition (print always had higher margins than online content, which is why so many magazine and newspaper companies are in trouble now), so they would try to encourage more print subscriptions. Once the fixed costs of writing the article are taken into account, the variable costs of each new subscriber are minimal at best, so the more subscribers paying the most is the most beneficial option to the Economist (or any publication).
The two real options are:
- Online: $59
- Print: $125
But by offering their options the way they do, a majority of users purchase the latter, paying more than double for the same content.


