Why Things Cost $19.95 | Weird Facts

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Ever wondered why retailers price goods at $4.99 rather than $5.00? Here is the best scientific explanation I read:

Why Things Cost $19.95, by Wray Herbert, SciAm Mind Matters: ...[M]ost of us are motivated by the desire for a fair deal, and we employ some sophisticated cognitive tools to weigh offers, fashion responses, and so forth—all the to-and-fro in getting to an agreement.

But how does life’s dickering play out in the brain? And is it a trustworthy tool for getting what we want? Psychologists have been studying cognitive bartering for some time, and several basics are well established. For example, an opening “bid” of any sort is usually perceived as a mental anchor, a starting point for the psychological jockeying to follow. ... What makes us settle on a response?

University of Florida marketing professors Chris Janiszewski and Dan Uy suspected that ... some characteristic of the opening bid itself might influence ... bidding behavior. In particular, they wanted to see if the degree of precision of the opening bid might be important to how the brain acts at an auction. Or, to put it in more familiar terms: Are we really fooled when storekeepers price something at $19.95 instead of a round 20 bucks?

Janiszewski and Uy ran a series of tests to explore this idea. The experiments used hypothetical scenarios, in which participants were required to make a variety of “educated guesses.” For example, they had subjects think about a scenario in which they were buying a high-definition plasma TV and asked them to guesstimate the wholesale cost. The participants were told the retail price, plus the fact that the retailer had a reputation for pricing TVs competitively.

There were three scenarios involving different retail prices: one group of buyers was given a price of $5,000, another was given a price of $4,988, and the third was told $5,012. When all the buyers were asked to estimate the wholesale price, those with the $5,000 price tag in their head guessed much lower than those contemplating the more precise retail prices. That is, they moved farther away from the mental anchor. What is more, those who started with the round number as their mental anchor were much more likely to guess a wholesale price that was also in round numbers. The scientists ran this experiment again and again with different scenarios and always got the same result.

Why would this happen? As Janiszewski and Uy explain..., people appear to create mental measuring sticks that run in increments away from any opening bid, and the size of the increments depends on the opening bid. That is, if we see a $20 toaster, we might wonder whether it is worth $19 or $18 or $21; we are thinking in round numbers. But if the starting point is $19.95, the mental measuring stick would look different. We might still think it is wrongly priced, but in our minds we are thinking about nickels and dimes instead of dollars, so a fair comeback might be $19.75 or $19.50.

The psychologists decided to check these lab findings in the real world. They looked at five years of real estate sales in Alachua County, Florida, comparing list prices and actual sale prices of homes. They found that sellers who listed their homes more precisely—say $494,500 as opposed to $500,000—consistently got closer to their asking price. ... Furthermore, houses listed in round numbers lost more value if they sat on the market for a couple of months. So, bottom line: one way to deal with a buyer’s market may be to pick an exact list price to begin with. ...

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Blogger Dies From Blogging Too Much. And No, It's Not A Joke. | Weird Facts

weird facts — They work long hours, often to exhaustion. Many are paid by the piece — not garments, but blog posts. This is the digital-era sweatshop. You may know it by a different name: home.

A growing work force of home-office laborers and entrepreneurs, armed with computers and smartphones and wired to the hilt, are toiling under great physical and emotional stress created by the around-the-clock Internet economy that demands a constant stream of news and comment.

Of course, the bloggers can work elsewhere, and they profess a love of the nonstop action and perhaps the chance to create a global media outlet without a major up-front investment. At the same time, some are starting to wonder if something has gone very wrong. In the last few months, two among their ranks have died suddenly.

Two weeks ago in North Lauderdale, Fla., funeral services were held for Russell Shaw, a prolific blogger on technology subjects who died at 60 of a heart attack. In December, another tech blogger, Marc Orchant, died at 50 of a massive coronary. A third, Om Malik, 41, survived a heart attack in December.

Other bloggers complain of weight loss or gain, sleep disorders, exhaustion and other maladies born of the nonstop strain of producing for a news and information cycle that is as always-on as the Internet.

To be sure, there is no official diagnosis of death by blogging, and the premature demise of two people obviously does not qualify as an epidemic. There is also no certainty that the stress of the work contributed to their deaths. But friends and family of the deceased, and fellow information workers, say those deaths have them thinking about the dangers of their work style.

The pressure even gets to those who work for themselves — and are being well-compensated for it.

“I haven’t died yet,” said Michael Arrington, the founder and co-editor of TechCrunch, a popular technology blog. The site has brought in millions in advertising revenue, but there has been a hefty cost. Mr. Arrington says he has gained 30 pounds in the last three years, developed a severe sleeping disorder and turned his home into an office for him and four employees. “At some point, I’ll have a nervous breakdown and be admitted to the hospital, or something else will happen.”

“This is not sustainable,” he said.

It is unclear how many people blog for pay, but there are surely several thousand and maybe even tens of thousands.

The emergence of this class of information worker has paralleled the development of the online economy. Publishing has expanded to the Internet, and advertising has followed.

Even at established companies, the Internet has changed the nature of work, allowing people to set up virtual offices and work from anywhere at any time. That flexibility has a downside, in that workers are always a click away from the burdens of the office. For obsessive information workers, that can mean never leaving the house.

Blogging has been lucrative for some, but those on the lower rungs of the business can earn as little as $10 a post, and in some cases are paid on a sliding bonus scale that rewards success with a demand for even more work.

There are growing legions of online chroniclers, reporting on and reflecting about sports, politics, business, celebrities and every other conceivable niche. Some write for fun, but thousands write for Web publishers — as employees or as contractors — or have started their own online media outlets with profit in mind.

One of the most competitive categories is blogs about technology developments and news. They are in a vicious 24-hour competition to break company news, reveal new products and expose corporate gaffes.

To the victor go the ego points, and, potentially, the advertising. Bloggers for such sites are often paid for each post, though some are paid based on how many people read their material. They build that audience through scoops or volume or both.

Some sites, like those owned by Gawker Media, give bloggers retainers and then bonuses for hitting benchmarks, like if the pages they write are viewed 100,000 times a month. Then the goal is raised, like a sales commission: write more, earn more.

Bloggers at some of the bigger sites say most writers earn about $30,000 a year starting out, and some can make as much as $70,000. A tireless few bloggers reach six figures, and some entrepreneurs in the field have built mini-empires on the Web that are generating hundreds of thousands of dollars a month. Others who are trying to turn blogging into a career say they can end up with just $1,000 a month.

Speed can be of the essence. If a blogger is beaten by a millisecond, someone else’s post on the subject will bring in the audience, the links and the bigger share of the ad revenue.

“There’s no time ever — including when you’re sleeping — when you’re not worried about missing a story,” Mr. Arrington said.

“Wouldn’t it be great if we said no blogger or journalist could write a story between 8 p.m. Pacific time and dawn? Then we could all take a break,” he added. “But that’s never going to happen.”

All that competition puts a premium on staying awake. Matt Buchanan, 22, is the right man for the job. He works for clicks for Gizmodo, a popular Gawker Media site that publishes news about gadgets. Mr. Buchanan lives in a small apartment in Brooklyn, where his bedroom doubles as his office.

He says he sleeps about five hours a night and often does not have time to eat proper meals. But he does stay fueled — by regularly consuming a protein supplement mixed into coffee.

But make no mistake: Mr. Buchanan, a recent graduate of New York University, loves his job. He said he gets paid to write (he will not say how much) while interacting with readers in a global conversation about the latest and greatest products.

“The fact I have a few thousand people a day reading what I write — that’s kind of cool,” he said. And, yes, it is exhausting. Sometimes, he said, “I just want to lie down.”

Sometimes he does rest, inadvertently, falling asleep at the computer.

“If I don’t hear from him, I’ll think: Matt’s passed out again,” said Brian Lam, the editor of Gizmodo. “It’s happened four or five times.”

Mr. Lam, who as a manager has a substantially larger income, works even harder. He is known to pull all-nighters at his own home office in San Francisco — hours spent trying to keep his site organized and competitive. He said he was well equipped for the torture; he used to be a Thai-style boxer.

“I’ve got a background getting punched in the face,” he said. “That’s why I’m good at this job.”

Mr. Lam said he has worried his blogging staff might be burning out, and he urges them to take breaks, even vacations. But he said they face tremendous pressure — external, internal and financial. He said the evolution of the “pay-per-click” economy has put the emphasis on reader traffic and financial return, not journalism.

In the case of Mr. Shaw, it is not clear what role stress played in his death. Ellen Green, who had been dating him for 13 months, said the pressure, though self-imposed, was severe. She said she and Mr. Shaw had been talking a lot about how he could create a healthier lifestyle, particularly after the death of his friend, Mr. Orchant.

“The blogger community is looking at this and saying: ‘Oh no, it happened so fast to two really vital people in the field,’ ” she said. They are wondering, “What does that have to do with me?”

For his part, Mr. Shaw did not die at his desk. He died in a hotel in San Jose, Calif., where he had flown to cover a technology conference. He had written a last e-mail dispatch to his editor at ZDNet: “Have come down with something. Resting now posts to resume later today or tomorrow.”

[Via - NYTimes.Com]

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School bans birthday cake

WELLINGTON (Reuters) - Children in a New Zealand school have been banned from bringing cakes to share on their birthdays, due to new government healthy eating guidelines.

Pupils at Oteha Valley primary school north of Auckland have been told they are allowed to celebrate their birthdays, but the cake must stay at home, the New Zealand Herald newspaper reported.

The Ministry of Education has been on a fat-busting crusade, introducing sweeping guidelines against unhealthy food in New Zealand schools.

Oteha Valley has a large number of pupils born in September and October, and there can be up to four cakes a week in some classes, principal Megan Bowden told the Herald.

It had gotten to the point where parents thought they were required to provide a cake for their child's birthday.

The school has advised parents in a newsletter to stop sending cakes to school from the next term.

A Ministry of Education spokesman told the Herald the government guidelines only applied to food sold on the premises, and schools did not need to monitor food brought in from outside.

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