Tim Harford's first five chapters contained many interesting ideas. My personal favorite idea came in chapter two with with the Starbucks menu board on P.32. The Starbucks contains 5 different drinks priced from $2.20 up to $3.40. Each item on this menu costs nearly the same to produce, down to a few cents. As mentioned by Harford, Starbucks is not trying to offer a variety of drinks to its customers, Starbucks is smoking out those customers who are less price sensitive.
By offering a wide range of products, a company can sell its "cheap" product to the price sensitive customer and its "premium" product to the luxurious consumers when in reality, they are both buying almost the same thing; at least something that cost the same to produce.
My favorite ploy by the coffee sellers was the "Free-Trade" coffee. Coffee that comes from farmers who are paid and treated "well". The coffee company can double or even triple a Guatemalan farmers salary while only increasing the cost to its coffee (per cup) by a penny or two. The coffee company uses "free-trade" coffee in the same way it uses its' premium drinks. Customers are willing to pay a dollar or so more for their coffee because it makes them feel better/special about themselves. "If I spend an extra dollar on my coffee, I'm making a difference in the world." Well, not really, But thinking you did sure makes you feel good inside.
So, in a sense, money can buy happiness.