A quick post to share a couple of odd examples of price discounts based on quantity that I recently found:
The advertisement clearly indicates that preferential prices are given from the 3rd mug. Let’s see: the first and second sell for 7€ each. The 3rd one comes for an extra 4€. So far, so good. Then the 4th mug is sold for another 7€… (!?) where is the preferential pricing? The fifth and subsequent mugs come for extra 5€ each. See it graphically below:
Think of a group of friends wanting to pool their purchase to lower the cost. If three friends had already decided to buy a mug, they would pay 18€, or 6€. If then came a fourth friend saying that she also wanted to join the group to buy a mug cheaper than the single one for 7€, the other 3 would have an incentive to reject her, as they would then have to pay 6.25€…
Let’s see this other example.
It comes from the colleagues at the Aeroclub du Sarladais. Here there are prices for short flight excursions. They offer 3 different flight durations with different prices for 1, 2 or 3 passengers. If more than 1 passenger flies, there is a discount. As there are several options, I prefer to use a table rather than a graphic to show what caught my attention:
In this case, in two of the cases, the marginal price to be paid by the 3rd passenger is more expensive than that to be paid by the 2nd passenger (I highlighted them in red). However, the oddity is not so striking as the average price to be paid by 3 passengers is always cheaper than the one to be paid by 2 passengers, thus, there is no economical incentive for 2 friends rejecting a 3rd wanting to join them in the experience of flying (good!).
I also found a more subtle issue with the pricing per minute for the 30 minute flights. Let’s see it with the flights for 1 passenger:
- 15′ sell for 45€, that is 3€ per minute.
- 20′ sell for 55€, that is 2.75€ per minute.
- 30′ sell for 80€, that is 2.67€ per minute.
So far, so good, however, if you look at the marginal prices of the added flight time:
- 20′-15′ = 5′, for 55€- 45€ = 10€, that is 2€ per minute.
- 30′-20′ = 10′, for 80€- 55€ = 25€, that is 2.5€ per minute. Why are these minutes more expensive? 🙂