Would you pay $70 to get $13,000 in return?
Sounds like an easy decision.
But when people faced exactly that choice, almost nobody took it.
In research by Jonathan Ash and Omri Ben-Shahar (2024), people selling their homes could choose between two listing options:
A free listing.
Or an upgraded listing for $70.
The paid listing received more clicks, increased the likelihood of selling by 18%, and resulted in higher sale prices – about $13,000 more on average.
It was clearly the better option.
Yet only 5% of sellers chose it.
This is the zero-price effect.
When something is free, it becomes disproportionately attractive, even when the alternative is clearly – and rationally – better.
So why is free so powerful?
Like most things, it's psychological.
People overweight a certain loss and underweight a probabilistic gain.
Free helps us avoid the risk of “losing” $70.
But it masks a much bigger – though speculative – risk: missing out on $13,000.
Which is why it’s so hard to convince people that putting money down can actually be the safer choice.
It simply doesn't feel like that.
Here’s how we could reframe the value of an upgrade:
-
“Sellers who upgrade typically sell for about $13,000 more. To upgrade is only $70.” This anchors the cost of a listing against the larger value.
-
“Free listings tend to generate $13,000 less than premium listings. You can upgrade for only $70.” Here we’re using negative framing (losing $13,000) to persuade.
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“Sellers who upgrade attract 18% more buyers on average.” Reiterating the value.
-
“If the upgraded listing doesn’t attract more views, we’ll refund the $70.” This nullifies perceived risk.
Bottom line, when trying to convince people to upgrade, we need to shift attention from “do I want to pay $70?” to “do I want to risk missing out on $13,000?”
Ref: Ash, D., & Ben-Shahar, D. (2024). Zero‐price effect and consumer welfare: Evidence from online classified real estate service. Real Estate Economics, 52(5), 1165–1196. https://doi.org/10.1111/1540-6229.12508
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