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December 18, 2015

You probably know those machines that (allegedly) allow you to win something by grabbing the prize with a mechanical claw. They usually make money by reducing the probability of winning, thus for every N plays that cost 1$ they give a prize worth N/Z $ (where Z is always bigger than N).

Last weekend I came across a variant of such a machine that guarantees winning the prize. Only, in this case, the prize is a rubber duck worth probably 5¢ (manufactured in China for probably less than 1¢ per piece...

December 15, 2015

Discounts are generally used to increase sales’ volume by decreasing prices and creating “buzz”. Nonetheless, I encountered an interesting way in which discounts are used to overcharge one-time-buyers.

Usually, promo codes and discounts are used to attract referral clients or in cross-selling. In the pictures above, however, this is clearly not the case. These pictures were taken in a Metro train in Washington DC. Since the promo code is publicly advertised, anyone who buys a ticket can use it to...

July 11, 2015

A while back, I heard the following definition:

A Bargain is something that you don’t need at a price that you can’t resist.

Although this definition might seem too anecdotal and a bit “trivial”, it is a wonderful illustration of the psychology behind bargains and it explains why sometimes we buy not-so-useful things.

The definition above illustrates that there are two types of "utilities" (benefits) involved in a commercial transaction.

For those of you who don’t know what utility is, it is a fancy...

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