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When More is Less

August 6, 2012

New research suggests that we’re prone to think a package deal is a better value if quantity is listed before price.

Transcript

BOB HIRSHON (host):

Quantity vs. price. I’m Bob Hirshon and this is Science Update.

Virginia Tech social scientist Rajesh Bagchi was out diaper shopping when it occurred to him: larger packages can make you feel like you’re getting more for the money, but if you actually do the math, they’re not always the best deal. So Bagchi decided to test how our perception of value differs depending on how package deals are presented. In one study, he and his colleague Derick Davis had volunteers choose between buying 70 mp3 songs for $29 vs. paying $29 for 70 songs. Both deals are the same, but Bagchi says people were much more attracted to the deal when quantity was presented before price.

RAJESH BAGCHI (Virginia Tech):

So you’re not thinking about the cost, but you’re thinking ‘you know what, 70 songs, that’s a lot of songs for only $29 dollars’, suddenly that seems like a much better deal than if you had $29 for 70 songs.

HIRSHON:

He says to get the best deal, bring a calculator to the store. I’m Bob Hirshon, for AAAS, the science society.

Calculating the per item cost of package deals can be difficult; and larger package deals aren't always the best value. (Jupiter Images)