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Second-Cheapest Syndrome

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Ever order the second-cheapest wine on the menu while dining out? You don't want to spend very much, but you also don't want to look like a cheapskate ordering the cheapest bottle on the whole menu. Well, one in four diners do (in the UK, at least). In the marketing world, we can define this as a choice set effect with respect to reference pricing—using the cheapest bottle of wine as a standard of comparison against which the other wines are compared.

But did you know that the second-cheapest bottle is usually the worst value?

From the Harvard Law Record: "Restaurant owners will often price the wine they buy cheapest at wholesale as the second-cheapest wine on the menu. Why? Because people generally don't order the cheapest wine and thus often turn to the second cheapest. Price that one higher, and you get a bigger marginal profit. Presto—restauranteur as microeconomist!"

The Wall Street Journal recently took it a step further and cracked the code of wine pricing. They found that the standard markup at a restaurant is about three times the wholesale cost, or twice the retail cost. However, restaurants employ what's called "progressive markup"—a cheap bottle could be priced three to four times wholesale, while an expensive wine may be marked up only 1.5 times.

Wine by the glass is even more of a rip off, as it carries the biggest markup. Typically, the first glass of wine sold pays for the cost of the entire bottle to the restaurant! But wine isn't the only thing with a high markup. Liquor and beer often carry a 500% markup.

So if you're looking for the biggest bang for your buck, consider a more expensive bottle, whose restaurant retail price is more closely aligned with its actual price. But if you can't go that high, then order the cheapest bottle. Be sure to tell your date about the "second-cheapest syndrome," though. That way you appear smart and savvy, instead of cheap. [Image courtesy of The Inn & Spa at Cedar Falls.]

Be sure to read more of what Diana learned today here.

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25 Benefits of Adopting a Rescue Dog
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According to the ASPCA, 3.3 million dogs enter shelters each year in the United States. Although that number has gone down since 2011 (from 3.9 million) there are still millions of dogs waiting in shelters for a forever home. October is Adopt a Shelter Dog Month; here are 25 benefits of adopting a shelter dog.

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How Urban Legends Like 'The Licked Hand' Are Born
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If you compare the scary stories you heard as a kid with those of your friends—even those who grew up across the country from you—you’ll probably hear some familiar tales. Maybe you tried to summon Bloody Mary by chanting her name in front of the mirror three times in a dark bathroom. Maybe you learned never to wonder what’s under a woman’s neck ribbon. Maybe you heard the one about the girl who feels her dog lick her hand in the middle of the night, only to wake up to find him hanging dead from the shower nozzle, the words “humans can lick too” written on the wall in the dog’s blood.

These ubiquitous, spooky folk tales exist everywhere, and a lot of them take surprisingly similar forms. How does a single story like the one often called “Humans Can Lick Too” or "The Licked Hand" make its way into every slumber party in America? Thrillist recently investigated the question with a few experts, finding that most of these stories have very deep roots.

In the case of The Licked Hand, its origins go back more than a century. In the 1990s, Snopes found that a similar motif dates back to an Englishman’s diary entry from 1871. In it, the diary keeper, Dearman Birchall, retold a story he heard at a party of a man whose wife woke him up in the middle of the night, urging him to go investigate what sounded like burglars in their home. He told his wife that it was only the dog, reaching out his hand. He felt the dog lick his hand … but in the morning, all his valuables were gone: He had clearly been robbed.

A similar theme shows up in the short story “The Diary of Mr. Poynter,” published in 1919 by M.R. James. In it, a character dozes off in an armchair, and thinks that he is petting his dog. It turns out, it’s some kind of hairy human figure that he flees from. The story seems to have evolved from there into its presently popular form, picking up steam in the 1960s. As with any folk tale, its exact form changes depending on the teller: sometimes the main character is an old lady, other times it’s a young girl.

You’ll probably hear these stories in the context of happening to a “friend of a friend,” making you more likely to believe the tale. It practically happened to someone you know! Kind of! The setting, too, is probably somewhere nearby. It might be in your neighborhood, or down by the local railroad tracks.

Thrillist spoke to Dr. Joseph Stubbersfield, a researcher in the UK who studies urban legends, who says the kind of stories that spread widely contain both social information and emotional resonance. Meaning they contain a message—you never know who’s lurking in your house—and are evocative.

If something is super scary or gross, you want to share it. Stories tend to warn against something: A study of English-language urban legends circulating online found that most warned listeners about the hazards of life (poisonous plants, dangerous animals, dangerous humans) rather than any kind of opportunities. We like to warn each other of the dangers that could be lurking around every corner, which makes sense considering our proven propensity to focus on and learn from negative information. And yes, that means telling each other to watch out for who’s licking our hands in the middle of the night.

Just something to keep in mind as you eagerly await Jezebel’s annual scary story contest.

[h/t Thrillist]

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