Reference:: R: Predictably Irrational by Dan Ariely
Zero is an emotional grenade. We love things that are FREE.
Why is that? One theory states that as humans, we are intrinsically afraid of loss (loss aversion). We prefer not to lose $100 than to gain $100 (most of us would even prefer not to lose $100 than to gain $150 or more). But, when something is free, there's no visible possibility of loss (you won't lose any money). There is nothing but an upside—you pay zero.
But as we know from anchoring, this isn't true. The first decision creates an anchor. Which creates an internal social proof mechanism—"I've done this before, so I'll do it again."
Also, reciprocity is at work here. You create a debt that you will feel an urge to repay. PN: New possessions create obligations
Also, the endowment effect is at work here. Companies give you something "for free," in a form of a sample, free trial, or money-back guarantee. However, once you own something, you start to value it irrationally more, and you're less likely to get rid of it because you want to avoid the pain of losing it.
Also, the status quo bias. Once we own something, the cost of switching gets higher. The new thing must offer higher value than the thing you own, plus "make up" for the pain of losing the thing you own. Switching to the new thing = New thing value - (Old thing value + pain of losing it)
The difference between two cents and one cent is small. But the difference between one cent and zero is huge!
Relevant notes (PN: )/questions (Q:):
PN: How to use all principles of persuasion: giving something for free adheres to the first step of the framework.