No. #23
Money Illusion
- Nominal vs. Real Value Perception
The money illusion refers to the tendency of people to think of currency in nominal, rather than real, terms. In other words, they focus on the face value of money rather than its purchasing power. This can influence how pricing and salary adjustments are perceived by users or employees.
Read more on WikipediaProduct example
Users may perceive a price as more expensive without considering inflation or the increased value of a product update.
Empathy tips
1
Adjust for Perception
When adjusting prices or wages, communicate the reasons and context clearly.
2
Purchasing Power Context
Provide context about the real value or purchasing power of prices and wages.
3
Educational Content
Offer content that helps users understand economic factors affecting pricing.
4
User Feedback
Gather user feedback on pricing perceptions to guide communication strategies.
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Anna Lundqvist
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