Research conducted by Dan Ariely (a Duke behavioral economist, previously at MIT) shows us that “free” is far more effective than “almost free.” Indeed, a preference for “free” seems to be another feature hardwired into our brains. The first experiment offered subjects a (Lindt chocolate) truffle for 15 cents (about half its actual cost) or a (Hershey’s) kiss for 1 cent. Nearly three out of four subjects chose the truffle, which seems logical enough based on the relative value of the offers.

The next experiment reduced the price of each product by one cent – the truffle was offered at 14 cents, and the kiss was free. Although the price differential remained the same, the behavior of the subjects changed dramatically: more than two thirds of the subjects chose the free chocolate kiss over the bargain-priced truffle.

Full article: