When purchasing a new product, consumers are often tempted to opt for the latest and greatest version, justifying the higher price tag with their perception of increased value. The actual value is different for each individual, and can be largely rooted in personal preference. While there are certainly benefits to most upgrades, many of these decisions are made impulsively, or based on poor logic. Is the durability of a hardcover book worth paying three times the price? Do you typically wear-out your paperbacks? It is important to consider how much of the benefit will actually be utilized to ensure that the upgrade is not merely out of desire to have the best.
A similar logic is often used upon the launch of a new product, as consumers rush to be the first to own one. These consumers can be found waiting in lines and paying high prices for buggy first versions of products that are typically made obsolete by better, cheaper versions only a few months later. This “early adopters tax” shows that patience is a virtue, especially when it comes to your pocketbook.
*Disclaimer regarding “early adopter tax” – Later versions of the products sometimes omit some non-key features but are for all intents and purposes overall a better package.