I was in Las Vegas this past week and wandered into the Wynn Hotel and Casino I was just in time for them to open their new “high roller” slot machine section, apparently the week before Christmas is one of the slowest weeks in Las Vegas so a lot of the casinos use this time to change out their gambling floors and repair and upgrade their shows — the pirate show at Treasure Island was also being repaired and you could see numerous other repair projects going on. The positive to this is that there are incredible deals to be had in Las Vegas since all the places are trying to get as much business as they can. As I wandered around the room filled mainly with $10 slot machines, but also $25, $100 and even $500 slot machines, there sat a Triple Diamond $1000 slot machine.
My first thought was, “are there really people that would play a $1000 slot machine?” While I am sure there are some people out there who are willing to put at risk the cost of a good used car with a few pulls of the handle, I’m sure that these people are few and far between. As I thought about it a bit more, my guess is that the $1000 slot machine was placed there more for psychological reasons than for hopes that it will constantly be played.
By placing a $1000 slot machine among the mix of other high denominations slot machines, the casino was playing on the psychological effect of “arbitrary coherence.” Studies have shown that although an initial price may seem “arbitrary,” once that price has been established in a consumer’s mind, that supposedly arbitrary number will shape the the thinking of the prices of other things as well (the consumer is making the prices “coherent”). In this case, the $1000 of the slot machine seems to be an arbitrary number, but once players see that $1000, it becomes an anchor for that room. Those that are playing slots see it and all of a sudden those $10 slot machines seem downright cheap, while the $25 and $100 slot machines aren’t really that expensive as well (it’s also why the high roller room is separated in it’s own space away from the $0.25, $1 and $5 slots.)
A perfect example of arbitrary coherence that most people can relate to is restaurant menu prices. Often you will see a few items on a restaurant menu that seem outrageously priced. Those items aren’t there in hopes that many customers will purchase them, but because they make all the other items on the menu seem much more reasonable in comparison. Stores do the same thing. They will often have a very expensive product next to similar products that are still expensive, but much less than the very expensive product. In comparison, these expensive products seem reasonable.
My guess is that even though the $1000 Triple Diamond slot machine gets very little pay time in the high roller slot machine room, it ends up serving its true purpose of getting people to play the other machines in the room quite well.