Editor’s note: Stephen J. Hellebusch is president of Hellebusch Research and Consulting Inc., Cincinnati.

In the book Predictably Irrational by Dan Ariely, a study is described that reveals something very interesting about the effect of context on how we make decisions. Knowledgeable and very intelligent people who were fully aware that certain numbers were chosen in a completely arbitrary, random fashion were still influenced by those numbers when making decisions about how much they would pay for certain items. This is described as arbitrary coherence, a term found in the behavioral economics literature. This is so illogical, and potentially so important for marketing research on pricing, that I replicated it to see for myself, as described in an article (“Under the influence”) that appeared in the May 2010 issue of Quirk’s.

In the original study, MIT students were asked three questions about several items that might be purchased in a store. However, the first step they were asked to take was irrelevant: to write the last two digits of their Social Security number (SSN) in dollars ($) next to the item. So, if their SSN ended in 12, they wrote $12. If it ended in 87, they wrote $87. Next, they were asked to indicate whether they would pay that amount for the item (yes/no). Finally, they were told to pretend the item was being auctioned, and to write in the amount they would be willing to pay. As the SSN$ went up, so did the amount the students were willing to pay.

In my prior study, in May 2009, 71 associates at Directions Research Inc., Cincinnati, graciously completed a task with each of four items: a 12-bar value-pack of Irish Spring soap; one pair of Dr. Scholl’s hand-stitched leather loafers; a 750ml bottle of Baileys Irish cream; and a Teleflora Spring Pitcher floral display. With a few reservations, the replication demonstrated that arbitrary coherence worked. For an item of low interest, Ba...