Companies can now charge customers more by tricking them into buying subscriptions.
What happened
Companies are using a new pricing strategy that relies on customers making mistakes. Many customers who would save money by subscribing are not doing so, and some who subscribe end up paying more than they would have without it.
Why it matters
This research shows that pricing strategies that work in theory do not always work in practice. People do not always make the choices that are best for them. Companies that want to use these pricing strategies need to account for how people actually behave, not just how they are supposed to behave. This means that the gains from these pricing strategies might be smaller than expected.
The signal
Watch whether companies start offering simpler subscription plans or more help to customers trying to choose the right plan.