I have, in the past, worked in a computer store. During that time we had varying degrees of disks available for sale. For the sake of interest, let us compare the cost to apearance of them.

  • Grey Floppies - 10 Pack w/ plastic case - $4.99
  • Black Floppies - 10 Pack w/ cardboard box - $5.49
  • Black Floppies - 10 Pack w/ plastic case - $5.99
  • Coloured Floppies - 10 Pack w/ cardboard box - $6.99
  • Coloured Floppies - 10 Pack w/ plastic case - $7.99
  • Translucent Coloured Floppies - 10 Pack w/ cardboard box - $7.99
  • Translucent Coloured Floppies - 10 Pack w/ plastic case - $8.99
Note: All floppy disks are of the same brand name.

The obvious price discrepancies aside, what I found amazing is the disks that people actually bought. I can see why someone might pay more for a nice plastic case than for a cheap cardboard box, but the most commonly sold disks were the translucent disks with the cheap cardboard box. I found this incredible! When you've decided to pay for coloured disks, you might as well drop the extra $1 and get a real case!

Even though I was recieving $1.00 from each sale of any sort of translucent disk, I still questioned people's decisions and tried to get them to make better use of their hard-earned money. "Buy cheaper disks, or at least get a plastic case," I told them, making the mistake of actually considering the best interests of my customers -- but to no avail. What can I say...

People are weird.

Someone that pays extra for the translucent floppy disks feels they are getting their money's worth. The utility per dollar they are getting out of translucent disks with a cardbord box exceeds the utility per dollar they feel they would get if they got translucent disks in a nice plastic case. This is why Andukar noticed people bought fancy disks but didn't get the fancy case too. They figured they already had a good enough case or didn't plan to use the case, so they perceved the value of the plastic case wasn't worth it.

The customer's preference can be seen as a utility function which would show the person's perception of the amount of utility that would be attained from using a good. For more information, look into a microeconomics book about the Theory of Consumer Behavior and Demand Analysis.

This has been an attempt to answer the question posed in the title of the node. Thank you.

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