Every day, we’re confronted with numbers, large and small, but are we unconsciously influenced by the size of a number? I’m Jim Metzner and this is the Pulse of the Planet.
Bagchi: So, for some reason, we think larger numbers have a larger impact than smaller numbers.
Rajesh Bagshi studies numerosity how the largeness of numbers effects decision making.
Bagchi: When you’re focusing on events that are in the near future, you tend to focus more on the numbers and not the units. And so, 30 days will seem larger than 1 month, because you are focusing on the actual numbers, which is going to be larger for days versus months.
So, with a certificate of deposit, if you have a short-term deposit, let’s say, for 2 months. When you present it as 60 days, people will think that the money has been with the bank for a longer duration than when you say two months, and they might actually want a larger return.
The same rules apply for store purchases.
Bagchi: I’d go to the supermarket to buy diapers, and I often bought the biggest package — 38 diapers, and I paid a certain amount for it. And I thought it was a great deal. Until, one day, I just looked at the price, which I never did, and I noticed that the case that had 19 diapers, which is half the size, actually had a lower unit price. So, per diaper, I would pay a lower price if I bought the case with 19 diapers.
So the large number of in this case – diapers, gives the impression to consumers that they’re getting a better deal.
Bagchi: I would encourage you to go to any supermarket and go look at the bigger-sized packages and the smaller-sized packages, and you will be amazed to find that, a lot of times, the bigger packages actually have a higher unit price. But, somehow, consumers don’t have a tendency of focusing on the unit price in fact, on the price at all. They just look at the package and say, “It should be a good deal.”
Pulse of the Planet is made possible in part by Virginia Tech, inventing the future through a hands-on approach to education and research.