[OPE-L:7405] [OPE-L:936] Re: analyzing the potato chip effect

Michael Perelman (michael@ecst.csuchico.edu)
Sun, 02 May 1999 18:25:43 -0700

Slawson, David. 1981. The New Inflation (Princeton: Princeton University
51: He says that by the late 1950s, the going price of a candy bar was five
cents. By 1983, it had risen to thirty-five cents. The price was
deliberately raised in a series of small five-cent increments by
manufacturers. "each increase was disguised by making the bar larger at the
same time -- the size of the bar having been gradually decreased since the
time of the last price rise. People generally choose candy bars on the basis
of taste and size, neither of which encourages them to make close distinctions
on the basis of price. Moreover manufacturers, one assumes deliberately, make
size difficult to assess by making the wrappers larger than the bars inside,
and by using variety of shapes."

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321 E-Mail michael@ecst.csuchico.edu