Study Uses Brainwaves to Determine How Much People Will Pay For Coffee

In the future, will businesses read your mind and make coffee (and everything else) more expensive? The Spiegel reports scientists from the Munich University of Applied Sciences are working on a method of market research that measures brainwaves to determine how much money a customer might be willing to pay for, say, a cup of coffee. Using Starbucks as an example, the study looked at a location in Stuttgart, which charges €1.80 (US $2.43) for a cup of coffee. And, as it turns out, that's much less than people are willing to pay.

The researchers showed the same cup of coffee to test subjects labeled with different prices, and measured brain activity the whole time. While prices on the high and low end of the spectrum (Spiegel gives the examples of "10 cents or €10 per cup") immediately triggered a reaction, the human brain remained relatively calm on coffee prices up to €2.40 (US $3.25) per cup. That's $.82 Starbucks is, according to the study, basically throwing away.

Another part of the study used a vending machine to figure out how people might set prices if not given guidelines. The machine had pre-set prices for coffee (about US $.95) and cappuccinos (US $1.08), but allowed customers to determine how much they were willing to pay for a latte macchiato. After a couple weeks, pretty much everyone was paying the same price for the lattes: US $1.29.

Earlier this year, the New Yorker looked at lobster prices, which remain high despite a glut. It turns out that because customers expect lobster to be more expensive, they become suspicious when the price drops. In other words, a 10 cent cup of coffee is almost as alarming as the €10 cup of coffee because the low price causes you to wonder what might be wrong with it. In the future, it seems, you will have no one to blame for high coffee prices but yourself.

· Is Your Coffee too Cheap? Using Brainwaves to Test Prices [Spiegel]
· All Starbucks Coverage on Eater [-E-]