Thursday, March 26, 2009

Some Weird Pricing

Below is the price menu from the Kentucky Fried Chicken (KFC) in Turkey (thanks to KorayYurekli for the photo).

What I find really puzzling is the pricing for chicken pieces (upper left side): They have set up their pricing scheme so that you do not actually save more my buying more; unless you are buying bulk, say a dozen pieces or more, the best way to go is to buy in sets of two: For example, it is actually cheaper to buy 2+1 rather than 3 pieces (8TL vs 8.25TL). Or let's say you want 5 pieces: You can either go for 5 at 13.50TL, or do a 3+2 for 8.25+5=13.25TL or even better, you can go for 2+2+1 at 5+5+3=13TL.

My first thought was that this was simply a pricing mistake. But when I looked at their delivery prices through Yemeksepeti, an online delivery service, I got slightly higher prices, but the same pricing scheme:

All the exercises I went through above work in exactly the same way, which makes me to believe that it is intentional. Moreover, the cashiers seem to be aware of it, too: I tried this quite a few times (see how demented I am), and unless the cashier is new to the job, they always give you the cheapest deal; for example, when you ask for six pieces, they will write it down as three orders of 2 pieces rather than a 5+1.

I am ashamed to say that after more than a decade of having studied and taught Economics, I could not find a reason, and neither can Koray, who is an engineer (those guys are supposed to be smarter than economists). As a a last resort, I consulted two friends who are hard core micro theorists; they have no crystal clear answer, either.

I am starting to believe that this is an issue worthy of being tackled by the Undercover Economist.

No comments: