August 12, 2005

Logic of Discounts


Filipinos just love bargain shopping whether it be clothes, food, pirated dvds or books. In these wallet-bleeding times, finding good discounts among the sale items are doubly rewarding. It gives one a feeling of euphoria just like when one hits the lotto albeit in degrees far lower, or when one hoodwinks another person. Of course, shelling out half of what you should normally pay increases the "value" of that item two folds. Hmmm... I guess there is a mathematical proof as to why all those discount items we have found creates twice the excitement just like finding a cache of hidden treasure.

It follows that if: (pardon my algebraic ignorance)

v = intrinsic value of the desired object
p = retail price

[p = v]

... this means that at a certain price, a desired object has a corresponding base intrinsic value. For instance, a Rolex watch has a high retail price giving it a higher intrinsic and market value than other cheaper watches.

if p is ½, what is v?
[½p = v]
[(2/1)½p = v(2/1)]
[p = 2v]

Ergo, if the item on hand shall have a 50% discount, its intrinsic value doubles. That explains that mongoose instinct why people get giddy when they find some high-value item that has been marked down. And that partially explains why Ukay-ukays flourish everywhere despite the possibility of contracting a complete set of body lice, fungal infections and body odor. And also explains why weekend Madness Sales click with Filipinos nationwide even if it means risking horrendous traffic and a horrible shoulder-to-shoulder experience.

Nonetheless, as they say, the thrill is in the hunt.

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