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The economist Alex Tabarrok has argued, that the success of this promotion lies in the fact that consumers value the first unit significantly more than the second one. So compared to a seemingly equivalent "Half price off" promotion, they may only buy one item at half price, because the value they attach to the second unit is lower than even the discounted price.
So, the three guests' cost of the room, including the bellhop's tip, is $27. Each of the 3 guests has $1 in his pocket, totaling $3. When added to the $27 revised cost of the room (including tip to the bellhop), the total is $30. To obtain a sum that totals to the original $30, every dollar must be accounted for, regardless of its location.
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The Best Labor Day Sales this year includes great deals such as a $65 mattress, a $20 set of sheets and 20% off Amazon bestselling pillows. Browse all of the deals available this Labor Day.
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