Tuesday, 28 September 2010

A story of perfect pricing

Thanks to Jonah Thomas, commenter on Marginal Revolution, for this beautiful story:


I once talked to a Marine who had served in the Philippines. There was a guy who sold bananas right outside the base. He sold one bunch of bananas for ten cents, and he sold three bunches of bananas for 35 cents. The Marine tried to explain to the man that his pricing was wrong. "Look. I buy one bunch of bananas. Here's a dime. I buy a second bunch of bananas. here's another dime. I buy a third bunch. Three dimes. I came out ahead! I got 3 bunches of bananas for thirty cents! But you wanted to sell them for thirty five cents!" The man would stare blankly at him and never understood, no matter how hard he explained. Lots of Marines tried to explain it and the man never figured it out.
Later my friend noticed that in town he could buy a bunch of bananas for 3 cents.

1 comment:

Min said...

A woman who was a sole proprietor of a small rock shop in the American Southwest told me this story. She had a case of semi-precious stones that was not selling. Before leaving for a week in Phoenix, she told her assistant to mark the stones at half price. When she got back, she was pleased to see that the case had nearly sold out. However, her assistant had misunderstood, and had doubled the prices of the stones. ;)