Jurassic Economics.

Question: How many people do you think live in Australia?
Is it above or below 60 million?
Take a guess. (No need to google, you’ll find out the answer here).

The other day, I went to watch Jurassic World, which was action packed, and made sense until the climax, which was quite surprising completely silly. So being an economics student (and relatively interested in mathematics and psychology), I naturally combined the two. And here is my research:

You may select a theatre on the basis of location, show timings or quality and price, just as you make choices regularly in everyday life. However, once inside the multiplex, these factors don’t apply.

Firstly, only the cinema can provide you access to food and drinks, and with that you are effectively in a monopoly. The price of the popcorn you bought? It’s anywhere between 30-50 times it would’ve cost you anywhere else. Soda’s? Overpriced and always containing ice. And the funny thing is, not many of us can really sit through two hours or more inside a theatre with nothing to eat or drink, exacberated by the constant slurping or chomping by those seated around you. It would ruin the complete experience.

Even the numbers are played against you. Consider this: Which of these will you buy, a drink arbitrarily costing 30, 50 or 100Β as according to size?

People mostly choose the one in between. Mainly because ’30 is too small’ and ‘100 is too large’.Β  And we are exploited due to that. Everywhere, regardless of whether this is a PVR or McDonalds, or even the racks of Levi’s, our brain is conditioned to middle everything down.

The ‘medium’ commodity is usually overpriced. For example, a soda will be sold for 30, 50 or 100 usually won’t be proportionate as to size. Invariably, the medium commodity will be overpriced. Invariably, you’ll also have a small voice in your mind telling you that it’s the one to buy. This is called the effect of Anchoring-the brain processes the first bit of information, and bases the second bit in comparison to it.

So here’s a tip: If you want a favour done from a friend, always ask them a big one first. Suppose you want a 100 bucks. Now, you ask them for 500, which is quite a bit larger. Now the friend refuses. So it’s your turn to decrease the quoted amount to 100, and you will see more co-operation.

This is simply how bargaining functions. The friend had an anchor at 500, and the newer, smaller amount is much lower than it, making the 100 buck offer instantly more attractive. (This depends on the friend too, I can’t vouch for everyone).

In the market, you’ll always see discounts. Many a times, these’ll just be ploys to make the product look like a bargain. If there’s a Blue-and-Black dress for a 1000 bucks, They may price it at 1250, but with a 20% discount on it. Making it effectively 1000 again. A similar dress in White-and-Gold may be priced at 1000 too, but most will go for the first, because it has a discount, which makes it much more appealing, despite there being no difference in price in either of them. For this reason, in many cases, you will always see a ‘limited period’ discount which subconsciously plays with the mind.
Exploitation at its best.

And the dress was black and blue, I swear.

Answer:

Australia’s population is around 23 million, making it one of the least dense countries in the world.

How wrong were you?

Well, mate, when I posed this question, you had no idea of its population (I’m assuming). So you based your guess from whatever information you have-60 million.

When I was posed this question myself, I had been given an anchor at 5 million. I said 15. Since I had a lower ‘anchor’ than the one above, my guess was also lower than yours, which was probably around 40-70 million. And this is how it works.

——
Ps-
I also learnt that selling beverages and eatables form the major chunk of a cinema’s revenue. Most of the proceeds from tickets end up in the distributors hands, and the high maintenance costs of cinemas, along with the electricity, labour, rent etc render the ticket sales insufficient for their functioning, long term.
Hence the high cost of consumables.

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28 thoughts on “Jurassic Economics.

Add yours

  1. That was informative, wow!
    Also, I just guessed below 60. I didn’t even think of a number. Wow, I feel silly!
    Also, yay! Blue and black it is!

    Liked by 1 person

  2. Wow! That does actually happen with me. The medium size and even the discounts. It’s like they mix psychology with marketing to achieve highest profits financially! I’ll keep this in mind. Thanks for sharing πŸ™‚

    Liked by 1 person

  3. Wow! you have really thought about all this! πŸ˜€ excellent piece I must say. Also the buy three at the price of two schemes? most of them make you buy in larger volumes that you otherwise don’t require so you are committed to their product for longer time, That way they earn your loyalty & your money too :p

    Liked by 1 person

    1. I never thought about it this way!
      For sure 3 for 2 looks pretty attractive, but yes, you do ingrain quite a bit of loyalty too!
      Thanks πŸ™‚

      Like

    1. I havent either, I study it through borrowing books and online material. Its nice, as you can study what you want, but quite a bit of hard work, as you never have a teacher.

      Like

  4. Hey Udit! This was a very interesting post, and I agree with you on each point! I run an online magazine, you can check it out at mirrorfect.in or find us on Facebook. I’d like to reblog it there, with you permission of course! It would come with due credit, and a mention of your blog, as in: This post first appeared on….

    Let me know! πŸ™‚

    Liked by 1 person

    1. Okay, I checked it out, it’s quite nice, saw your posts there.
      I’d like that, yes, it’s quite flattering, really. Though I think I may need to edit the post?
      Thank You.

      Like

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