How to sell a 5¢ product for 1$
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).
The nice twist is that the machine charges 1$ and allows the person to play till they win… re-framing it, it sells for 1$ is a 5¢ rubber duck + the thrill of winning + making the player work for it, thus making her/ him value the rubber duck more.
Not a bad business idea …