Sunk cost can be used to great effect. When considering the pricing of items in camera systems, it is readily apparent that a low entry cost can easily attract a large following. Beginners are a lot happier to plonk money down for a cheap unit than an expensive one, obviously.
Then comes the 2-year itch. Some never feel it, some give up and others just can't seem to stop upgrading. Time to ditch the beginner's model and work on something better. What's important then is the next tier, whereby a close upgrade will be desirable and another close upgrade and so on. Of course, to top it all, there needs to be a highly desirable but extremely out of reach aspiration tier.
Of course, this means that there needs to be multiple tiers with routine upgrades, forming a fairly gradual ladder to the top. What's best about this pricing method is that the sunk cost simply builds and builds. First it looks pretty small at a thousand or so, then a few hundreds sink in...and soon we're talking thousands of dollars invested. The sunk cost becomes the shackles that hold users within a system. However, it's also essential to make sure the ladder works fine, or the honeypot will lose its stickiness.
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