Joseph Gallo, the founder of the famous wine company that bears his name, said that when he first started selling wine right after Prohibition (laws outlawing the sale of alcohol), he poured two glasses of wine from the same bottle and put a price of 10 cents a bottle on one and 5 cents a bottle on the other. He let people test both and asked them which they wanted. Most wanted the 10-cent bottle, even though they were the same wine. What does this tell us about people? Can you think of other areas where that may be the case? What does this suggest about pricing?

Question

Heidy Berger

Social Studies

5 August, 04:35

Joseph Gallo, the founder of the famous wine company that bears his name, said that when he first started selling wine right after Prohibition (laws outlawing the sale of alcohol), he poured two glasses of wine from the same bottle and put a price of 10 cents a bottle on one and 5 cents a bottle on the other. He let people test both and asked them which they wanted. Most wanted the 10-cent bottle, even though they were the same wine. What does this tell us about people? Can you think of other areas where that may be the case? What does this suggest about pricing?

+1

Answers (1)

Know the Answer?

Heath Shah · Answer 1

Answer: Our brain perceives something more expensive as being better, just as the study by Stanford University and Caltech did an experiment in which participants should try two low quality wines (unaware of this information). They were informed that one wine cost $ 5 and the other $ 45. Through brain mapping, the researchers found that participants felt more pleasure when they tasted the wine they believed to cost $ 45.