A notable feature of prices is that so many end in 99. This a something of a puzzle for economists: the obvious explanation - that people "see" £4.00 as much higher than £3.99 - clashes with the idea that people are rational; another - that such prices act as an honesty check by requiring the shop assistant to give change and hence put the transaction through the till - seems outdated in an era of plastic. One theoretically more elegant possibility is that rational consumers save on calculation time by assuming all prices end in XX; retailers rationally react to this by setting all prices to end in 99 since this maximises their profits; and consumers in turn rationally react to that by assuming XX to be 99. So it's a reinforcing equilibrium that prices ends in 99.
I'll try to work out what this means for the end of the universe over the weekend.
I was just reading "Post Truth" by Evan Davis, which has a whole bunch of stuff about this, in terms of framing and managing expectations etc.
In terms of this specific question, yes, if everything ends in 99 then it's a lot like the pound example, except not as clean. Basically you'd end up owing a round figure only if you buy a hundred things, so it's sort of the same answer but also not. Otherwise it just gets mixed in with everything else
I used to live near a proper entropy pub - order two of the same pint, and you’d occasionally get a bill than ends in an odd number.
Sounds like your ex-bar was a biased estimator.
Sorry, I'll get my coat
Still, it was a pretty standard error in those parts.
See you at the coat stand.
A notable feature of prices is that so many end in 99. This a something of a puzzle for economists: the obvious explanation - that people "see" £4.00 as much higher than £3.99 - clashes with the idea that people are rational; another - that such prices act as an honesty check by requiring the shop assistant to give change and hence put the transaction through the till - seems outdated in an era of plastic. One theoretically more elegant possibility is that rational consumers save on calculation time by assuming all prices end in XX; retailers rationally react to this by setting all prices to end in 99 since this maximises their profits; and consumers in turn rationally react to that by assuming XX to be 99. So it's a reinforcing equilibrium that prices ends in 99.
I'll try to work out what this means for the end of the universe over the weekend.
I was just reading "Post Truth" by Evan Davis, which has a whole bunch of stuff about this, in terms of framing and managing expectations etc.
In terms of this specific question, yes, if everything ends in 99 then it's a lot like the pound example, except not as clean. Basically you'd end up owing a round figure only if you buy a hundred things, so it's sort of the same answer but also not. Otherwise it just gets mixed in with everything else