Would you rather get a 33% bigger coffee for no extra charge or pay 33% less for the regular size? Do you know how to avoid being tricked into buying more than you need? Keep on reading The Math Dude to learn about the number behind savvy shopping.
What’s the Best Deal?
People prefer to make choices between similar and easily-comparable options.
As I mentioned at the outset, most savvy shopping skills are really less about math and more about avoiding the number-based psychological hacks that marketers (would love to) play on you. While perusing the news this week, I found an article discussing a perfect example of this kind of sneaky hackery.
This example was originally described in Dan Ariely's book Predictably Irrational, in which he talks about running across an advertisement to subscribe to the magazine The Economist. The advertisement lists 3 possible deals:
- Web-only subscription for $59/year
- Print-only subscription for $125/year
- Print + web subscription for $125/year
If confronted with these options, which would you choose? If you’re anything like the 100 MIT students that Dan Ariely posed this question to, you’d pick the print + web subscription for $125/year; 84% of the MIT students chose that offer, while 16% chose the cheaper web-only subscription.
Not surprisingly, nobody chose the middle print-only option. After all, it’s a pretty bad deal compared to the third option, which gives you the same thing plus something extra, all for the same price. But if that middle option is such a bad deal, why did the marketers even bother to include it?
To answer this question, Dan Ariely removed the second option from the list and presented the two remaining options to another group of 100 MIT students. This time, with just the $59 web-only and $125 print + web subscriptions to choose from, 68% chose the cheaper web-only subscription and 32% chose the print + web subscription. Remember, when all three options were available, 84% of students chose the more expensive option and only 16% chose the cheaper subscription.
So why did the marketers include that strange print-only subscription option? Because they also figured out that more people would choose the more expensive subscription if the print-only option was there.
What’s the math behind this? There isn’t any—this one is purely psychological. Sure, there are numbers involved, but all they’re really doing here is pointing out that people prefer to make choices between similar and easily-comparable options - so when they’re given the opportunity to do so, they will.
Okay, that’s all the math we have time for today.
For more fun with math, please check out my book, The Math Dude’s Quick and Dirty Guide to Algebra. And remember to become a fan of The Math Dude on Facebook, where you’ll find lots of great math posted throughout the week. If you’re on Twitter, please follow me there, too.
Until next time, this is Jason Marshall with The Math Dude’s Quick and Dirty Tips to Make Math Easier. Thanks for reading, math fans!
Calculator-in-a-shopping cart image courtesy of Shutterstock.