The Invisible Game

Chapter 5Price = Maths + Story

We would not be surprised if someone is thinking right now: ‘I don't sell wine and I don't sell coffee, so what does all this science have to do with me?’

To answer that question, we turn first to Nobel Prize winners George Akerlof (2001) and Robert Schiller (2013), who wrote a book together in 2009 called, Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism. While they focus on macroeconomics, their comments on the importance of psychological aspects such as trust, fairness, and confidence are just as salient for day-to-day business. They write that these aspects ‘are real motivations for real people. They are ubiquitous. The presumption of mainstream macroeconomics that they have no important role strikes us as absurd.’¹

In other words, behavioural economics, psychology, and neuroscience apply to anyone who is selling, buying, or negotiating. We are all humans and thus subject to the same forces and effects. The concepts we have described so far – and the ones we will introduce throughout the rest of Parts II and III – reflect natural human tendencies with respect to prices and buying decisions. While some of our specific recommendations apply more to salespeople in larger organizations, most will apply just as much to independent professionals and individual business owners. They apply regardless of the industry, product, or service or the size of your business.

For a long time, classical economics ...