07 Jul 2012
The 11 Ways That Consumers Are Hopeless at Math

I remember our kids constantly whining about math class when they were in school, wondering how it would ever be useful ...

It's not just consumers that can fall prey to their own psychology. Here's a story for you, along these lines. Several years ago (and I mean several), the company I owned at the time got a gig writing software for a major (as in Fortune 500) chemical company, coding the blenders that allowed them to turn plastic pellets into carpet fibers. While working there, I the purchasing department asked if I ever sold hardware, and would I be interested in bidding on their yearly computer purchases? Of course I would! So I set up suppliers and quotes to get them some excellent deals on XT beige boxen, and priced them nearly $1000 below when I figured my competitors would have to charge. I was spot on the pricing, but lost the bid! When I asked about this, they told me frankly that my price was too low - they figured the machines must be crap. So the next bidding cycle, I quoted the same exact machine, raised the price by $750 (still under the Big Iron vendor, but only by about $200) and got the deal, pocketing the extra. It's a lesson I've never forgotten.

You walk into a Starbucks and see two deals for a cup of coffee. The first deal offers 33% extra coffee. The second takes 33% off the regular price. What's the better deal?

(link) [The Atlantic]

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