1 00:00:15,370 --> 00:00:32,930 Speaker 1: Pushkin in a tin roof chack in a slum of Manila, 2 00:00:33,290 --> 00:00:38,290 Speaker 1: the capital of the Philippines. Victoria Angelo lived with her husband, Puanito, 3 00:00:38,730 --> 00:00:43,210 Speaker 1: and their five children. Puanito was a rickshaw driver. He 4 00:00:43,290 --> 00:00:46,850 Speaker 1: made around four dollars a day. Life was a daily grind. 5 00:00:47,450 --> 00:00:51,250 Speaker 1: Hard work alone offered no route out of poverty. So 6 00:00:51,650 --> 00:00:55,330 Speaker 1: when the Pepsi Cola company started a new promotion in 7 00:00:55,450 --> 00:01:01,450 Speaker 1: nineteen ninety two, Victoria took notice. Number fever seemed easy 8 00:01:01,490 --> 00:01:05,090 Speaker 1: to understand by a bottle of Pepsi, and under the 9 00:01:05,090 --> 00:01:08,730 Speaker 1: bottle cap you'd see printed a three digit number and 10 00:01:09,090 --> 00:01:14,050 Speaker 1: a cash prize amount. Every night, on the Channel two 11 00:01:14,210 --> 00:01:18,570 Speaker 1: TV news program, Pepsi would announce a winning number. If 12 00:01:18,650 --> 00:01:21,490 Speaker 1: you had a bottle cap with that number, you'd win 13 00:01:21,530 --> 00:01:25,650 Speaker 1: the amount shown. The prizes went up to a million 14 00:01:25,730 --> 00:01:30,490 Speaker 1: paceos some forty thousand dollars. It would take Juanito thirty 15 00:01:30,610 --> 00:01:36,290 Speaker 1: years to earn that. Victoria started buying Pepsi. Every night, 16 00:01:36,530 --> 00:01:39,610 Speaker 1: she watched Channel two for the announcement of the winning number, 17 00:01:39,770 --> 00:01:44,970 Speaker 1: and she checked her growing collection of bottle caps, and 18 00:01:45,610 --> 00:01:52,050 Speaker 1: every night she was disappointed until one night the television 19 00:01:52,050 --> 00:01:57,290 Speaker 1: announced the number three four nine hold on Victoria was 20 00:01:57,330 --> 00:02:00,610 Speaker 1: sure she had a bottle cap marked three for nine. 21 00:02:00,930 --> 00:02:03,770 Speaker 1: Here it is. Now, what's the amount on the cap? 22 00:02:04,850 --> 00:02:10,130 Speaker 1: One million paceos. You can feelish school, you can get 23 00:02:10,170 --> 00:02:14,090 Speaker 1: the gullege. She told her children. We can buy a 24 00:02:14,210 --> 00:02:18,290 Speaker 1: real house. It seemed like a dream come true. But 25 00:02:18,730 --> 00:02:23,970 Speaker 1: unknown to Victoria, something very strange was happening in homes 26 00:02:24,210 --> 00:02:28,410 Speaker 1: all across the Philippines. Exactly the same scene was playing out. 27 00:02:29,170 --> 00:02:33,010 Speaker 1: Families were watching Channel two checking their collection of bottle caps, 28 00:02:33,170 --> 00:02:36,170 Speaker 1: discovering that they had one printed with three for nine 29 00:02:36,170 --> 00:02:40,530 Speaker 1: and a million Paco prize, and celebrating their incredible good fortune. 30 00:02:41,770 --> 00:02:45,850 Speaker 1: What had happened, It's not clear exactly. Instead of printing 31 00:02:45,930 --> 00:02:48,690 Speaker 1: just two bottle caps with three for nine on them, 32 00:02:48,810 --> 00:02:55,010 Speaker 1: they'd accidentally printed hundreds of thousands, and nobody at PEPSI 33 00:02:55,370 --> 00:02:58,850 Speaker 1: had noticed the problem. But three for nine had just 34 00:02:58,970 --> 00:03:03,450 Speaker 1: been announced as a winning number. PEPSI would notice the 35 00:03:03,490 --> 00:03:09,290 Speaker 1: problem soon enough. I'm Tim Harford and you're listening to 36 00:03:09,490 --> 00:03:36,450 Speaker 1: cautionary tales. In Worcester, England, a physicist called Phil Calcutt 37 00:03:36,650 --> 00:03:39,810 Speaker 1: was doing his regular shop at his local supermarket Tesco. 38 00:03:40,970 --> 00:03:43,810 Speaker 1: As he strolled down the fruit tile, a special offer 39 00:03:43,850 --> 00:03:47,210 Speaker 1: caught his attention. Buy a bunch of bananas and get 40 00:03:47,250 --> 00:03:51,490 Speaker 1: twenty five Tesco club card points. The bananas cost one 41 00:03:51,570 --> 00:03:55,730 Speaker 1: pound and seventeen pence. The points were worth fivepence each. 42 00:03:56,370 --> 00:03:59,650 Speaker 1: Mister Calcutt did the math. He'd get club card points 43 00:03:59,690 --> 00:04:03,650 Speaker 1: worth eight pence more than the bananas cost. Could that 44 00:04:03,690 --> 00:04:07,450 Speaker 1: be right? He double checked his mental arithmetic. Yes, he'd 45 00:04:07,490 --> 00:04:10,410 Speaker 1: make a profit of eightpence on every bunch of bananas 46 00:04:10,410 --> 00:04:14,890 Speaker 1: he bought. So mister Calcott piled his trolley seven feet 47 00:04:14,970 --> 00:04:18,250 Speaker 1: high with bananas. Then he got another trolley and filled 48 00:04:18,290 --> 00:04:22,730 Speaker 1: that with bananas too. My living room was stacked from 49 00:04:22,770 --> 00:04:26,610 Speaker 1: floor to ceiling with twenty five cases containing around three 50 00:04:26,730 --> 00:04:30,010 Speaker 1: thousand bananas. But when I popped back for some more, 51 00:04:30,090 --> 00:04:32,730 Speaker 1: they said they would only sell me one case, which 52 00:04:32,770 --> 00:04:35,250 Speaker 1: is quite understandable because they seemed to be making a 53 00:04:35,290 --> 00:04:38,690 Speaker 1: loss on it. When he'd redeemed his Tesco club card points, 54 00:04:38,890 --> 00:04:41,850 Speaker 1: mister Calcott ended up with a profit of twenty five 55 00:04:41,930 --> 00:04:46,970 Speaker 1: pounds and twelvepence, a modest sum, perhaps, but far more 56 00:04:47,050 --> 00:04:50,450 Speaker 1: valuable was all the fun he had distributing free bananas 57 00:04:50,490 --> 00:04:55,090 Speaker 1: like some comic book superhero around his neighborhood. Children in 58 00:04:55,130 --> 00:04:57,930 Speaker 1: the street. Now shout banana man whenever they see me. 59 00:05:02,370 --> 00:05:07,490 Speaker 1: Whoever in Tesco's marketing department had proposed that promotion evidently 60 00:05:07,610 --> 00:05:10,850 Speaker 1: hadn't done the math, nor had the manager who signed 61 00:05:10,850 --> 00:05:14,410 Speaker 1: off on it, nor had any of Tesco's millions of 62 00:05:14,490 --> 00:05:22,170 Speaker 1: other customers. Only one man had noticed banana man. Is 63 00:05:22,210 --> 00:05:27,130 Speaker 1: that surprising? Probably not if you're the mathematician John Allan Paulos, 64 00:05:27,290 --> 00:05:31,610 Speaker 1: who wrote the classic book in Numeracy. Paulos tells the 65 00:05:31,650 --> 00:05:34,570 Speaker 1: story of watching the TV news with a friend, a 66 00:05:34,650 --> 00:05:38,690 Speaker 1: notoriously pedantic friend, the sort who'd correct you for saying 67 00:05:38,970 --> 00:05:44,410 Speaker 1: continuously when you mean continually. The weather forecast came on. 68 00:05:44,890 --> 00:05:48,330 Speaker 1: There's a fifty percent chance of rain on Saturday and 69 00:05:48,410 --> 00:05:52,130 Speaker 1: a fifty percent chance on Sunday, so there's certain to 70 00:05:52,170 --> 00:05:56,890 Speaker 1: be rain this weekend. Paulos turned to his friend. Did 71 00:05:56,890 --> 00:06:01,330 Speaker 1: you hear that? How embarrassing? What was I'm sure you've 72 00:06:01,370 --> 00:06:04,690 Speaker 1: noticed the forecasters mistake. In fact, there's a one in 73 00:06:04,770 --> 00:06:08,410 Speaker 1: four chance of no rain, the same probability of flipping 74 00:06:08,410 --> 00:06:12,490 Speaker 1: a coin twice and getting two tails. It's the seventy 75 00:06:12,530 --> 00:06:17,610 Speaker 1: five percent years of weekend rain. Obviously it is. I mean, 76 00:06:17,650 --> 00:06:20,810 Speaker 1: oh yeah, sure, when it comes to numbers, said Paulos. 77 00:06:21,330 --> 00:06:26,050 Speaker 1: Even the smartest among us are unobservant. Companies know that 78 00:06:26,730 --> 00:06:29,690 Speaker 1: they take advantage of it all the time. We see 79 00:06:29,690 --> 00:06:32,890 Speaker 1: the low monthly payment in big type and forget to 80 00:06:32,970 --> 00:06:36,090 Speaker 1: multiply by the number of months we keep paying our 81 00:06:36,210 --> 00:06:40,370 Speaker 1: monthly gym membership instead of dividing it by our monthly visits, 82 00:06:40,410 --> 00:06:42,650 Speaker 1: and seeing we should switch to pay as you go. 83 00:06:43,530 --> 00:06:48,330 Speaker 1: We buy extended warranties on household appliances when some simple 84 00:06:48,370 --> 00:06:53,370 Speaker 1: probability would suggest we should take our chances. Number fever 85 00:06:53,610 --> 00:06:57,210 Speaker 1: played on that numerical laziness. Flip the cap off your 86 00:06:57,250 --> 00:07:00,210 Speaker 1: bottle of PEPSI, see a three digit number and a 87 00:07:00,250 --> 00:07:03,090 Speaker 1: million pay so prize, and you might naturally get the 88 00:07:03,130 --> 00:07:05,650 Speaker 1: impression that you have a one in a thousand chance 89 00:07:05,690 --> 00:07:10,810 Speaker 1: of winning. Not too shabby and not of course, think 90 00:07:10,850 --> 00:07:14,090 Speaker 1: about it, and you'd quickly realize that Pepsi must have 91 00:07:14,170 --> 00:07:18,930 Speaker 1: printed far more losing numbers than winning ones, wouldn't they 92 00:07:19,970 --> 00:07:22,970 Speaker 1: The true chance of winning was vastly smaller than one 93 00:07:23,090 --> 00:07:28,250 Speaker 1: in a thousand. When consumers fail to do the sums, 94 00:07:28,690 --> 00:07:32,730 Speaker 1: we get screwed. But what happens when it's the companies 95 00:07:32,730 --> 00:07:36,010 Speaker 1: that mess up? As we'll see the answer is often 96 00:07:36,290 --> 00:07:48,130 Speaker 1: that consumers still get screwed, often, but not always. An 97 00:07:48,130 --> 00:07:52,170 Speaker 1: engineer called David Phillips was shopping in his local supermarket 98 00:07:52,450 --> 00:07:56,730 Speaker 1: in Davis, California, in nineteen ninety nine. He noticed a 99 00:07:56,810 --> 00:08:01,050 Speaker 1: new promotion by a food brand called Healthy Choice. Send 100 00:08:01,090 --> 00:08:04,210 Speaker 1: in ten barcodes from their products and they'd give you 101 00:08:04,490 --> 00:08:07,890 Speaker 1: five hundred air miles. They'd double it to a thousand 102 00:08:07,890 --> 00:08:10,930 Speaker 1: if you sent them in before a certain deadline. Just 103 00:08:11,050 --> 00:08:14,890 Speaker 1: like banana man Phil Calcutt, mister Phillips paused to do 104 00:08:14,970 --> 00:08:18,850 Speaker 1: the math. How much is an air mile worth? That 105 00:08:18,890 --> 00:08:21,890 Speaker 1: can vary depending on how you redeem them, but Phillips 106 00:08:21,930 --> 00:08:26,170 Speaker 1: calculated one air mile was surely worth at least two cents. 107 00:08:27,050 --> 00:08:31,130 Speaker 1: His family liked Healthy Choice frozen meals, which cost two dollars. 108 00:08:31,930 --> 00:08:36,210 Speaker 1: Ten frozen meals twenty dollars. Send in the barcodes and 109 00:08:36,250 --> 00:08:39,770 Speaker 1: he'd get a thousand air miles, also worth at least 110 00:08:39,890 --> 00:08:43,450 Speaker 1: twenty dollars. Who said there was no such thing as 111 00:08:43,490 --> 00:08:48,690 Speaker 1: a free lunch, Phillips filled his freezer. Then he thought, 112 00:08:49,410 --> 00:08:53,050 Speaker 1: what else is in the Healthy Choice product line? If 113 00:08:53,050 --> 00:08:56,010 Speaker 1: he could find products for cheaper than two dollars, he'd 114 00:08:56,010 --> 00:08:58,730 Speaker 1: be getting back more in air miles than he would 115 00:08:58,770 --> 00:09:02,610 Speaker 1: spend on the food. I found Healthy Choice soups that 116 00:09:02,690 --> 00:09:07,210 Speaker 1: were less than a dollar tin soup perfect, it would 117 00:09:07,290 --> 00:09:11,050 Speaker 1: keep forever and didn't need more freezer space. David bought 118 00:09:11,090 --> 00:09:14,810 Speaker 1: all the Healthy Choice soups in his local supermarket. Then 119 00:09:14,890 --> 00:09:18,250 Speaker 1: he went to other nearby supermarkets and bought all their 120 00:09:18,330 --> 00:09:22,770 Speaker 1: Healthy Choice soups too. Soon he had accumulated eight hundred 121 00:09:22,890 --> 00:09:28,290 Speaker 1: cans of soup. By this point, David's wife, Cindy was 122 00:09:28,330 --> 00:09:30,810 Speaker 1: wondering if this might all be a little too good 123 00:09:30,810 --> 00:09:33,530 Speaker 1: to be true. Are you sure you haven't missed something 124 00:09:33,530 --> 00:09:35,770 Speaker 1: in the small print? Maybe there's a limit on how 125 00:09:35,770 --> 00:09:39,370 Speaker 1: many miles you can claim. David poured over the terms 126 00:09:39,370 --> 00:09:43,690 Speaker 1: and conditions. In return. For every ten barcodes and proof 127 00:09:43,690 --> 00:09:47,970 Speaker 1: of purchase, it said Healthy Choice would issue a certificate 128 00:09:48,130 --> 00:09:51,890 Speaker 1: for air miles. The certificates could be redeemed with six 129 00:09:52,010 --> 00:09:56,130 Speaker 1: different airlines, and while two of them did indeed stipulate 130 00:09:56,130 --> 00:09:59,490 Speaker 1: a limit on how many certificates they would redeem, the 131 00:09:59,610 --> 00:10:03,570 Speaker 1: other four didn't. In fact, the offer told consumers to 132 00:10:03,610 --> 00:10:05,890 Speaker 1: remember there was no limit to the number of miles 133 00:10:05,890 --> 00:10:09,210 Speaker 1: they could earn with just three weeks to go. For 134 00:10:09,290 --> 00:10:14,330 Speaker 1: the deadline, mister Phillips stumbled on a startling new opportunity. 135 00:10:15,010 --> 00:10:20,330 Speaker 1: One supermarket chain grocery outlet had started selling Healthy Choice 136 00:10:20,530 --> 00:10:26,330 Speaker 1: chocolate puddings for just twenty five cents. Remember, Healthy Choice 137 00:10:26,370 --> 00:10:30,370 Speaker 1: was effectively offering air miles worth at least two dollars 138 00:10:30,370 --> 00:10:33,290 Speaker 1: on every one of those puddings. There was no time 139 00:10:33,290 --> 00:10:37,170 Speaker 1: to lose. I drove to about fifteen grocery store outlet 140 00:10:37,210 --> 00:10:39,450 Speaker 1: stores in a weekend. I filled up my van with 141 00:10:39,570 --> 00:10:42,650 Speaker 1: chocolate pudding. After that, I made contact with a local 142 00:10:42,690 --> 00:10:46,090 Speaker 1: grocery store outlet manager had him special order me sixty 143 00:10:46,090 --> 00:10:52,250 Speaker 1: more cases. David Phillips now had over twelve thousand chocolate 144 00:10:52,290 --> 00:10:57,410 Speaker 1: puddings and a problem. Two problems in fact, how would 145 00:10:57,410 --> 00:11:01,850 Speaker 1: his family ever eat all those puddings? The second problem 146 00:11:02,010 --> 00:11:05,370 Speaker 1: was more pressing, how would he managed to peel off 147 00:11:05,570 --> 00:11:11,650 Speaker 1: twelve thousand barcodes in just three weeks? But mister Phillips 148 00:11:11,690 --> 00:11:14,770 Speaker 1: was a resourceful man, and he realized he could solve 149 00:11:14,850 --> 00:11:19,130 Speaker 1: both problems at once. He contacted his local food bank 150 00:11:19,290 --> 00:11:22,850 Speaker 1: and offered to donate all the chocolate puddings if their 151 00:11:22,930 --> 00:11:25,650 Speaker 1: volunteers would do him the favor of taking off the 152 00:11:25,690 --> 00:11:31,570 Speaker 1: barcodes for him. They said yes. Phillips meticulously organized his 153 00:11:31,650 --> 00:11:35,330 Speaker 1: barcodes into bundles of ten and filled in the claims 154 00:11:35,330 --> 00:11:39,090 Speaker 1: forms over a thousand of them, enough for over a 155 00:11:39,210 --> 00:11:43,610 Speaker 1: million air miles. That would basically be all the long 156 00:11:43,650 --> 00:11:48,250 Speaker 1: haul holidays his family could ever want. David Phillips posted 157 00:11:48,290 --> 00:11:54,930 Speaker 1: off his barcodes and waited. There was no immediate reply 158 00:11:55,210 --> 00:11:57,930 Speaker 1: from Healthy Choice, but he had read the small print 159 00:11:58,370 --> 00:12:00,890 Speaker 1: that said it would take six to eight weeks for 160 00:12:00,970 --> 00:12:05,930 Speaker 1: the air mile certificates to arrive. Six weeks past, then 161 00:12:06,290 --> 00:12:11,170 Speaker 1: eight weeks. Now, Phillips was to get worried. With still 162 00:12:11,450 --> 00:12:17,050 Speaker 1: no response from Healthy Choice, he phoned them up Disaster. 163 00:12:18,090 --> 00:12:22,490 Speaker 1: They said they had no record of receiving any barcodes 164 00:12:22,570 --> 00:12:31,810 Speaker 1: from him at all. Cautionary tales will return after this message. 165 00:12:39,250 --> 00:12:43,090 Speaker 1: After Channel two News announced that three four nine was 166 00:12:43,090 --> 00:12:46,490 Speaker 1: the winning number on the Pepsi bottle tops, crowds of 167 00:12:46,610 --> 00:12:50,610 Speaker 1: jubilant customers descended on Pepsi plants to claim their prizes. 168 00:12:52,970 --> 00:12:57,130 Speaker 1: It soon became clear that something had gone horribly wrong. 169 00:12:57,970 --> 00:13:01,650 Speaker 1: How much would it cost Pepsi to honor all the prizes? 170 00:13:02,570 --> 00:13:08,050 Speaker 1: Upwards of fifteen billion dollars It was roughly half the 171 00:13:08,050 --> 00:13:11,770 Speaker 1: Philippines gross domestic product. More to the point, it was 172 00:13:11,810 --> 00:13:16,050 Speaker 1: close to the entire market capitalization of the Pepsi Corporation, 173 00:13:16,490 --> 00:13:20,050 Speaker 1: not just in the Philippines but the whole world. There 174 00:13:20,210 --> 00:13:25,290 Speaker 1: was simply no way that Pepsi could afford it. Panicked 175 00:13:25,370 --> 00:13:28,690 Speaker 1: executives held a crisis meeting at three o'clock in the morning. 176 00:13:29,170 --> 00:13:32,890 Speaker 1: They apologized for the computer glitch. They pointed out that 177 00:13:33,010 --> 00:13:37,130 Speaker 1: every bottle cap also contained a security code, and explained 178 00:13:37,170 --> 00:13:40,090 Speaker 1: that this would identify the two bottle caps they had 179 00:13:40,130 --> 00:13:43,410 Speaker 1: intended to be winners, and for everyone else with a 180 00:13:43,530 --> 00:13:46,370 Speaker 1: three four nine bottle top, they decided to offer a 181 00:13:46,490 --> 00:13:51,930 Speaker 1: goodwill payment of five hundred pasos, a mere twenty dollars. 182 00:13:55,170 --> 00:13:58,930 Speaker 1: The bottle tops came flooding in four hundred and eighty 183 00:13:58,970 --> 00:14:02,650 Speaker 1: six thousand, one hundred and seventy of them. The goodwill 184 00:14:02,730 --> 00:14:07,490 Speaker 1: payments cost PEPSI about ten million dollars, five times what 185 00:14:07,570 --> 00:14:11,690 Speaker 1: they'd initially budgeted for the tire number fever campaign, but 186 00:14:11,770 --> 00:14:16,250 Speaker 1: it wasn't enough to quell everyone's outrage. Thousands of people 187 00:14:16,410 --> 00:14:19,970 Speaker 1: kept hold of their three four nine bottle tops. They'd 188 00:14:19,970 --> 00:14:24,410 Speaker 1: thought their lives were about to change forever. Now they 189 00:14:24,410 --> 00:14:28,250 Speaker 1: were being offered just twenty dollars. That wasn't going to 190 00:14:28,250 --> 00:14:33,610 Speaker 1: buy their goodwill. They were determined to make PEPSI pay. 191 00:14:38,010 --> 00:14:42,810 Speaker 1: David Phillips was determined two. He'd gone to all that trouble, 192 00:14:43,170 --> 00:14:48,210 Speaker 1: buying eight hundred tins of soup and twelve thousand chocolate puddings, 193 00:14:48,330 --> 00:14:52,210 Speaker 1: organizing all the barcodes, filling in all the forms, and 194 00:14:52,330 --> 00:14:55,210 Speaker 1: now he learned that the package he had sent to 195 00:14:55,330 --> 00:15:00,290 Speaker 1: Healthy Choice had apparently gone missing. This seemed pretty incredible, 196 00:15:00,330 --> 00:15:03,410 Speaker 1: given that I mailed the package registered and someone on 197 00:15:03,490 --> 00:15:07,290 Speaker 1: their end signed for the package. But would a man 198 00:15:07,370 --> 00:15:11,330 Speaker 1: as meticulous as David Phillips failed to plan for that 199 00:15:11,450 --> 00:15:19,370 Speaker 1: eventuality Not likely. Phillips had photocopied everything. He'd even videotaped 200 00:15:19,450 --> 00:15:22,690 Speaker 1: himself buying the chocolate puddings and stacking them up in 201 00:15:22,730 --> 00:15:26,370 Speaker 1: his house, just to be on the safe side. Presented 202 00:15:26,410 --> 00:15:32,770 Speaker 1: with this evidence, Healthy Choice quickly caved. Mister Phillips got 203 00:15:32,810 --> 00:15:37,890 Speaker 1: his air miles think for a moment about what David 204 00:15:37,930 --> 00:15:43,050 Speaker 1: Phillips did. He hadn't just done one calculation, the numerical 205 00:15:43,090 --> 00:15:45,890 Speaker 1: one that showed the sums on the chocolate puddings didn't 206 00:15:45,890 --> 00:15:49,490 Speaker 1: add up. He'd made a second kind of calculation, too, 207 00:15:50,370 --> 00:15:54,730 Speaker 1: a pragmatic calculation about how things work in the real world. 208 00:15:55,570 --> 00:15:58,810 Speaker 1: All along, I was somewhat worried that Healthy Choice wouldn't 209 00:15:58,850 --> 00:16:03,010 Speaker 1: honor the deal. Packages do sometimes go missing, It's true, 210 00:16:03,730 --> 00:16:07,170 Speaker 1: so he'd taken practical steps to make it expensive for 211 00:16:07,250 --> 00:16:11,130 Speaker 1: Healthy Choice to refuse him his air miles, ensuring that 212 00:16:11,170 --> 00:16:13,250 Speaker 1: if the company tried to back out of the deal, 213 00:16:13,610 --> 00:16:18,050 Speaker 1: the media would have a field day with the story. Companies, too, 214 00:16:18,490 --> 00:16:22,810 Speaker 1: make both kinds of calculations about their marketing offers, numerical 215 00:16:23,290 --> 00:16:27,690 Speaker 1: and pragmatic. Sometimes they fall down on the numbers. It 216 00:16:27,730 --> 00:16:31,610 Speaker 1: makes no sense to pay shoppers to buy bananas, But 217 00:16:31,810 --> 00:16:35,250 Speaker 1: on some marketing offers, they know the numbers wouldn't add 218 00:16:35,330 --> 00:16:38,130 Speaker 1: up if everyone took advantage, and they rely on the 219 00:16:38,210 --> 00:16:43,850 Speaker 1: pragmatic calculation that many customers won't bother. That's what's happening 220 00:16:43,890 --> 00:16:48,530 Speaker 1: when retailers offer rebates on a purchase. Rather than simply 221 00:16:48,570 --> 00:16:52,570 Speaker 1: reduce the price, they make you pay full price, then 222 00:16:52,730 --> 00:16:56,010 Speaker 1: mail off the receipt or the barcode to claim your rebate. 223 00:16:56,650 --> 00:17:00,650 Speaker 1: Whether such promotions pay off depends on what proportion of 224 00:17:00,730 --> 00:17:05,050 Speaker 1: customers actually do claim. There's even a term of art 225 00:17:05,170 --> 00:17:08,290 Speaker 1: for the percentage of consumers who fail to follow through 226 00:17:09,090 --> 00:17:14,770 Speaker 1: a breakage rate. Marketing professors Tim Silk and Chris Yanishevski 227 00:17:15,090 --> 00:17:19,010 Speaker 1: study the factors that affect breakage rates. There are principles 228 00:17:19,050 --> 00:17:24,410 Speaker 1: from psychology textbooks, such as hyperbolic discounting. That's the tendency 229 00:17:24,450 --> 00:17:28,250 Speaker 1: to put higher value on more immediate rewards. Promise a 230 00:17:28,330 --> 00:17:32,370 Speaker 1: rebate check quickly and you'll motivate people to apply. Promise 231 00:17:32,410 --> 00:17:35,250 Speaker 1: it in six to eight weeks, and maybe they won't 232 00:17:35,250 --> 00:17:39,810 Speaker 1: bother then there are sneaky little tricks putting the barcode 233 00:17:39,810 --> 00:17:43,930 Speaker 1: on tough, thick cardboard that's hard to cut with household scissors. 234 00:17:44,770 --> 00:17:49,290 Speaker 1: Increasing the breakage rate is a serious and cynical business. 235 00:17:50,410 --> 00:17:53,490 Speaker 1: When the UK branch of Hoover launched a big new 236 00:17:53,530 --> 00:17:57,370 Speaker 1: promotion in nineteen ninety two, they gambled on a high 237 00:17:57,530 --> 00:18:01,970 Speaker 1: breakage rate. They were offering two free flights to Europe 238 00:18:02,090 --> 00:18:05,650 Speaker 1: to anyone who spent one hundred pounds on a Hoover appliance. 239 00:18:06,050 --> 00:18:09,650 Speaker 1: That's about two hundred and fifty dollars in today's money. 240 00:18:10,050 --> 00:18:13,330 Speaker 1: It's not a bad deal at all. In fact, it's 241 00:18:13,490 --> 00:18:16,130 Speaker 1: such a good deal that Hoover knew they couldn't afford 242 00:18:16,170 --> 00:18:19,290 Speaker 1: for too many customers to take up the offer, so 243 00:18:19,370 --> 00:18:22,970 Speaker 1: they made it logistically difficult. You had to snail mail 244 00:18:23,010 --> 00:18:25,810 Speaker 1: the receipt for the item you'd purchased and wait for 245 00:18:25,850 --> 00:18:28,570 Speaker 1: Hoover to send you a form, fill that in, and 246 00:18:28,650 --> 00:18:31,090 Speaker 1: wait for Hoover to send you a voucher. Then you 247 00:18:31,130 --> 00:18:34,690 Speaker 1: had to choose three possible dates and destinations and wait 248 00:18:34,730 --> 00:18:36,450 Speaker 1: for Hoover to let you know if any of them 249 00:18:36,450 --> 00:18:43,690 Speaker 1: were available, and on and on. Only the most determined 250 00:18:43,770 --> 00:18:47,050 Speaker 1: customers had the patients to persevere to the point where 251 00:18:47,050 --> 00:18:50,090 Speaker 1: they actually got on a plane. It looks like Hoover 252 00:18:50,210 --> 00:18:53,250 Speaker 1: managed to keep the breakage rate high enough to make 253 00:18:53,290 --> 00:18:59,770 Speaker 1: their giveaway deal profitable. Then Hoover became overconfident they decided 254 00:18:59,810 --> 00:19:04,410 Speaker 1: to expand the offer to include flights to America. This 255 00:19:04,490 --> 00:19:08,770 Speaker 1: was a much bigger incentive to return. Flights from Britain 256 00:19:08,770 --> 00:19:12,210 Speaker 1: to America cost about five times the price of a 257 00:19:12,250 --> 00:19:17,930 Speaker 1: Hoover vacuum cleaner, and Hoover's pragmatic calculation about breakage was 258 00:19:18,050 --> 00:19:21,690 Speaker 1: way off. Beam far more people applied for flights than 259 00:19:21,730 --> 00:19:27,170 Speaker 1: they'd expected. Crucially, the applicants also proved far more tenacious 260 00:19:27,450 --> 00:19:32,410 Speaker 1: than Hoover had hoped, many initially heard nothing back. When 261 00:19:32,410 --> 00:19:35,730 Speaker 1: they followed up, Hoover said their application forms must have 262 00:19:35,730 --> 00:19:40,970 Speaker 1: been lost in the post. They became frustrated and suspicious. 263 00:19:42,130 --> 00:19:45,850 Speaker 1: David Dixon, a horse trainer in Cumbria, was among the 264 00:19:45,930 --> 00:19:49,730 Speaker 1: disgruntled customers who had bought a Hoover appliance a washing 265 00:19:49,730 --> 00:19:52,970 Speaker 1: machine in his case, and then had trouble claiming his 266 00:19:53,090 --> 00:19:56,330 Speaker 1: free flights to America. I have fucked them, I have 267 00:19:56,530 --> 00:20:00,290 Speaker 1: retner them, I have formed them, And then, to add 268 00:20:00,370 --> 00:20:05,610 Speaker 1: insult to injury, his washing machine broke down. Hoover sent 269 00:20:05,690 --> 00:20:09,610 Speaker 1: a technician who failed to sympathize with mister Dixon and plight. 270 00:20:10,370 --> 00:20:13,850 Speaker 1: According to the technician, the offer was obviously too good 271 00:20:13,890 --> 00:20:16,650 Speaker 1: to be true. Mister Dixon should surely have realized there 272 00:20:16,770 --> 00:20:18,970 Speaker 1: must be some kind of catch. If do you think 273 00:20:19,010 --> 00:20:20,850 Speaker 1: bang a washing machines are going to get you two 274 00:20:20,890 --> 00:20:26,290 Speaker 1: tickets to America, you must be an idiot, an idiote. 275 00:20:26,690 --> 00:20:30,170 Speaker 1: We'll see about that. While the technician was fixing his 276 00:20:30,210 --> 00:20:33,930 Speaker 1: washing machine, mister Dixon drove his horsebox in front of 277 00:20:33,970 --> 00:20:38,570 Speaker 1: the Hoover truck, blocking it in. He told the technician 278 00:20:38,650 --> 00:20:42,130 Speaker 1: to walk home and pass on a message to his employers, well, 279 00:20:42,170 --> 00:20:46,810 Speaker 1: I'll get me tickets. They'll get there vun. Mister Dixon 280 00:20:46,850 --> 00:20:51,690 Speaker 1: became something of a folk hero. The BBC meanwhile sent 281 00:20:51,770 --> 00:20:56,250 Speaker 1: an undercover reporter to investigate what was going on. She 282 00:20:56,370 --> 00:20:58,770 Speaker 1: got a job in the agency that was processing the 283 00:20:58,810 --> 00:21:02,410 Speaker 1: applications for free flights on who was behalf. It went 284 00:21:02,530 --> 00:21:05,610 Speaker 1: something like this, So what would you like me to do. 285 00:21:06,130 --> 00:21:08,570 Speaker 1: Here's a list of people, contact them and offer them 286 00:21:08,610 --> 00:21:12,730 Speaker 1: flights London. These people all live in Glasgow. That's four 287 00:21:12,810 --> 00:21:17,170 Speaker 1: hundred miles from London. That's right. But the person sitting 288 00:21:17,170 --> 00:21:19,090 Speaker 1: next to me is phoning people who live in London 289 00:21:19,130 --> 00:21:21,690 Speaker 1: and telling them we can only offer them flights from Glasgow. 290 00:21:22,770 --> 00:21:27,210 Speaker 1: He gets you one fast love. When the BBC investigation 291 00:21:27,410 --> 00:21:31,650 Speaker 1: was broadcast, it did not play well for Hoover. They 292 00:21:31,690 --> 00:21:37,610 Speaker 1: eventually begrudgingly bought over two hundred thousand flights at a 293 00:21:37,650 --> 00:21:41,890 Speaker 1: cost of over seventy million dollars. The majority of customers 294 00:21:42,130 --> 00:21:45,610 Speaker 1: had given up without getting their flights, but the company's 295 00:21:45,610 --> 00:21:49,450 Speaker 1: reputation had taken a hit, so had their market share 296 00:21:49,490 --> 00:21:52,730 Speaker 1: in the UK. Part of the problem was that anyone 297 00:21:52,770 --> 00:21:56,850 Speaker 1: who wanted a Hoover appliance could find plenty of attractive 298 00:21:56,890 --> 00:22:01,450 Speaker 1: deals in the classified ads never used still in their 299 00:22:01,450 --> 00:22:04,970 Speaker 1: original packaging. People had bought them just to get the 300 00:22:04,970 --> 00:22:10,170 Speaker 1: air tickets. No wonder Hoover's parent company, the executives who 301 00:22:10,170 --> 00:22:14,090 Speaker 1: had approved the promotion and quietly sold off the European 302 00:22:14,170 --> 00:22:18,810 Speaker 1: arm of the company for a knock down price. For 303 00:22:19,010 --> 00:22:23,170 Speaker 1: Pepsi executives in the Philippines, merely getting fired might have 304 00:22:23,210 --> 00:22:27,250 Speaker 1: seemed like a relief compared to the continuing disaster of 305 00:22:27,410 --> 00:22:31,530 Speaker 1: number fever. They were getting so many death threats they 306 00:22:31,610 --> 00:22:36,770 Speaker 1: needed round the clock security. Pepsi erected barbed wire barricades 307 00:22:36,810 --> 00:22:41,010 Speaker 1: around its processing plants. Dozens of its trucks were attacked. 308 00:22:41,730 --> 00:22:45,850 Speaker 1: In one tragic case, a grenade thrown at a Pepsi 309 00:22:45,890 --> 00:22:50,410 Speaker 1: truck in Manila bounced off and killed a schoolteacher and 310 00:22:50,530 --> 00:22:54,290 Speaker 1: a five year old girl. The small print of the 311 00:22:54,370 --> 00:22:58,370 Speaker 1: number fever adverts did mention the existence of a security 312 00:22:58,410 --> 00:23:01,850 Speaker 1: code on the bottle tops, but was it sufficiently clear 313 00:23:01,930 --> 00:23:05,290 Speaker 1: that the prize depended on the security code, not just 314 00:23:05,410 --> 00:23:10,970 Speaker 1: on the three digit number. PEPSI found itself fighting thousands 315 00:23:10,970 --> 00:23:24,370 Speaker 1: of lawsuits after this message. Cautionary tales will return, even 316 00:23:24,410 --> 00:23:28,970 Speaker 1: as the number fever lawsuits raged on. Pepsi found itself 317 00:23:29,050 --> 00:23:33,810 Speaker 1: once again in a numerical dispute described in Matt Parker's 318 00:23:33,810 --> 00:23:39,210 Speaker 1: book of mathematical mishaps, Humble Pie. This dispute followed yet 319 00:23:39,250 --> 00:23:43,890 Speaker 1: another promotion called Pepsi Points, this time running in the 320 00:23:43,970 --> 00:23:49,770 Speaker 1: United States. A thirty second advert starts with the caption Monday, 321 00:23:50,050 --> 00:23:53,650 Speaker 1: seven fifty eight am and an external shot of an 322 00:23:53,770 --> 00:23:57,610 Speaker 1: ordinary suburban house. Cut to the inside of the house, 323 00:23:58,130 --> 00:24:00,370 Speaker 1: A cool young dude is wearing a T shirt with 324 00:24:00,410 --> 00:24:04,490 Speaker 1: a Pepsi logo. He slicks back his hair, T shirt 325 00:24:04,890 --> 00:24:09,690 Speaker 1: seventy five Pepsi points flashes the on screen caption. He 326 00:24:09,770 --> 00:24:14,210 Speaker 1: dons a leather jacket. Leather jacket fourteen hundred and fifty 327 00:24:14,290 --> 00:24:18,730 Speaker 1: Pepsi points, ongo, the sunglasses one hundred and seventy five 328 00:24:18,970 --> 00:24:24,970 Speaker 1: Pepsi points. Then a voiceover the introduce Pepsi stuffed chaveler. 329 00:24:26,130 --> 00:24:29,010 Speaker 1: Now the more Pepsi a drink club, more of great stuff. 330 00:24:29,010 --> 00:24:35,450 Speaker 1: You're going again. Meanwhile, on screen, there's a school classroom. 331 00:24:35,450 --> 00:24:38,770 Speaker 1: From outside, there's some kind of loud noise and strong 332 00:24:38,810 --> 00:24:42,850 Speaker 1: wind blowing books and papers everywhere. Other students watch in 333 00:24:42,930 --> 00:24:47,330 Speaker 1: amazement as the cool dude arrives in a Harrier jump 334 00:24:47,450 --> 00:24:51,450 Speaker 1: jet doing a vertical landing in the school yard. He 335 00:24:51,570 --> 00:24:55,930 Speaker 1: steps out sipping a can of Pepsi, and on screen 336 00:24:56,410 --> 00:25:07,850 Speaker 1: Harrier Fighter seven million Pepsi points. Sure beat the bush? Yes, 337 00:25:08,090 --> 00:25:12,290 Speaker 1: very good? Held on? Has anyone done the math on this? 338 00:25:13,410 --> 00:25:15,970 Speaker 1: A can of Pepsi was one point, but once you 339 00:25:16,010 --> 00:25:18,570 Speaker 1: had a few points from Pepsi purchases, you could buy 340 00:25:18,690 --> 00:25:22,730 Speaker 1: additional points for ten cents apiece, So a T shirt 341 00:25:22,770 --> 00:25:27,090 Speaker 1: at seventy five points was effectively seven dollars fifty fair enough, 342 00:25:27,490 --> 00:25:31,650 Speaker 1: a leather jacket one hundred and forty five dollars not unreasonable. 343 00:25:32,170 --> 00:25:37,330 Speaker 1: And a Harrier Fighter, let's see seven million times ten cents, 344 00:25:37,370 --> 00:25:43,530 Speaker 1: that's seven hundred thousand dollars. Doesn't that sound cheap for 345 00:25:43,650 --> 00:25:48,410 Speaker 1: a fighter jet? The US military paid over twenty million 346 00:25:48,450 --> 00:25:52,370 Speaker 1: dollars for each of its AV eight Harrier two jump jets. 347 00:25:52,810 --> 00:25:55,650 Speaker 1: If you could get one from Pepsi for seven hundred 348 00:25:55,690 --> 00:26:04,530 Speaker 1: thousand dollars, that would be an absolute steal. There are 349 00:26:04,530 --> 00:26:08,730 Speaker 1: a few cultures now very rare, whose counting words only 350 00:26:08,810 --> 00:26:14,610 Speaker 1: cover one two big number, but that's because they rarely 351 00:26:14,690 --> 00:26:19,130 Speaker 1: need to talk about large numbers. Modern marketing executives do, 352 00:26:19,890 --> 00:26:23,490 Speaker 1: and yet when it came to the Harrier, Pepsi's decision 353 00:26:23,530 --> 00:26:28,050 Speaker 1: makers were helpless. Once those Pepsi points started mounting up, 354 00:26:28,570 --> 00:26:32,890 Speaker 1: all they could seem to think was big number. Enter 355 00:26:33,010 --> 00:26:37,530 Speaker 1: twenty one year old business student John Leonard. He somehow 356 00:26:37,610 --> 00:26:41,810 Speaker 1: raised seven hundred thousand dollars, which he deposited with a lawyer. 357 00:26:42,530 --> 00:26:45,810 Speaker 1: He bought fifteen cans of Pepsi and sent off his 358 00:26:45,970 --> 00:26:50,530 Speaker 1: fifteen Pepsi points with a check for seven hundred thousand 359 00:26:50,570 --> 00:26:54,290 Speaker 1: and eight dollars and fifty cents. That was to cover 360 00:26:54,370 --> 00:26:58,050 Speaker 1: the remaining six million, nine hundred ninety nine, nine hundred 361 00:26:58,050 --> 00:27:02,130 Speaker 1: and eighty five Pepsi points plus the ten dollars delivery charge. 362 00:27:04,010 --> 00:27:08,090 Speaker 1: Pepsi wrote back politely, the item that you have requested 363 00:27:08,250 --> 00:27:11,250 Speaker 1: is not included the catalog or on the order form 364 00:27:11,370 --> 00:27:15,530 Speaker 1: the Harrier jet and the Pepsi commercials. Fanciful. We apologize 365 00:27:15,530 --> 00:27:18,570 Speaker 1: for any misunderstanding or confusion that you may have experienced. 366 00:27:19,770 --> 00:27:24,410 Speaker 1: Mister Leonard had his lawyer swing into action. Your letter 367 00:27:24,490 --> 00:27:28,890 Speaker 1: of May seven, nineteen ninety six is totally unacceptable. We 368 00:27:28,930 --> 00:27:32,330 Speaker 1: have reviewed the videotape at the Pepsi stuff commercial and 369 00:27:32,450 --> 00:27:36,850 Speaker 1: it clearly offers the new Harrier jet for seven million 370 00:27:37,090 --> 00:27:41,530 Speaker 1: PEPSI points. This as a formal demand that you honor 371 00:27:41,650 --> 00:27:46,370 Speaker 1: your commitment and make immediate arrangements to transfer the new 372 00:27:46,650 --> 00:27:51,250 Speaker 1: Harrier Jet to our client. The case went to court, 373 00:27:51,570 --> 00:27:54,730 Speaker 1: where District Judge Kimba Wood had to decide if the 374 00:27:54,770 --> 00:28:00,370 Speaker 1: advert was serious. She came to the understandable conclusion that 375 00:28:00,490 --> 00:28:05,410 Speaker 1: it wasn't. The callow youth featured in the commercial is 376 00:28:05,450 --> 00:28:11,090 Speaker 1: a highly improbable pilot. The teenage's comment that flying a 377 00:28:11,290 --> 00:28:16,290 Speaker 1: Harrier Jet to school sure beats the bus evinces an 378 00:28:16,370 --> 00:28:23,010 Speaker 1: improbably ensusian attitude toward the relative difficulty and danger of 379 00:28:23,210 --> 00:28:27,850 Speaker 1: piloting a fighter plane in a residential area as opposed 380 00:28:27,850 --> 00:28:32,290 Speaker 1: to taking public transportation. Might some other court take a 381 00:28:32,290 --> 00:28:37,050 Speaker 1: different view? Probably not, But Pepsi decided to edit its 382 00:28:37,050 --> 00:28:42,490 Speaker 1: commercial just in case. Harrier now cost seven hundred million 383 00:28:42,610 --> 00:28:48,450 Speaker 1: PEPSI points. Again big number, but this time big enough. 384 00:28:51,170 --> 00:28:54,170 Speaker 1: I assume John Leonard knew that his chance of winning 385 00:28:54,210 --> 00:28:56,930 Speaker 1: the case was small, and that if he lost, there'd 386 00:28:56,970 --> 00:28:59,770 Speaker 1: be lawyers fees to pay. It must have been a 387 00:28:59,890 --> 00:29:04,570 Speaker 1: calculated gamble. Judge Kimbawood summed up why she wasn't letting 388 00:29:04,650 --> 00:29:10,210 Speaker 1: that gamble pay off. An objective reasonable person would conclude 389 00:29:10,250 --> 00:29:14,730 Speaker 1: that purchasing a fighter plane for seven hundred thousand dollars 390 00:29:15,330 --> 00:29:19,290 Speaker 1: is a deal too good to be true. Fair enough, 391 00:29:20,090 --> 00:29:23,690 Speaker 1: But can we predict if a corporate marketing bungle is 392 00:29:23,770 --> 00:29:26,650 Speaker 1: likely to have a happy ending? Can we come up 393 00:29:26,690 --> 00:29:29,370 Speaker 1: with a taxonomy of the too good to be true 394 00:29:29,970 --> 00:29:34,570 Speaker 1: from these stories? Perhaps we can. It's all about that 395 00:29:34,730 --> 00:29:39,410 Speaker 1: pragmatic calculation. Imagine if you will a tool beloved by 396 00:29:39,490 --> 00:29:43,530 Speaker 1: marketing types, a two by two matrix, how much will 397 00:29:43,530 --> 00:29:46,370 Speaker 1: it cost the company to pay up and how bad 398 00:29:46,410 --> 00:29:49,930 Speaker 1: will it make the company look to wriggle out? In 399 00:29:50,010 --> 00:29:55,010 Speaker 1: one corner, expensive promises with an easy get out. In 400 00:29:55,010 --> 00:29:57,850 Speaker 1: this corner is John Leonard with his video of the 401 00:29:57,890 --> 00:30:02,170 Speaker 1: Pepsi staff ad Harrier jets are expensive and did it 402 00:30:02,210 --> 00:30:06,010 Speaker 1: make Pepsi look unreasonable to fight the case? Not really. 403 00:30:07,130 --> 00:30:11,290 Speaker 1: At the other extreme, cheap promises with no means of escape, 404 00:30:12,170 --> 00:30:16,330 Speaker 1: here stands David Phillips with his stack of chocolate puddings. 405 00:30:17,050 --> 00:30:20,970 Speaker 1: Giving one customer a pile of air miles wasn't especially 406 00:30:21,010 --> 00:30:25,490 Speaker 1: expensive set against the entire healthy choice marketing campaign, and 407 00:30:26,210 --> 00:30:30,290 Speaker 1: thanks to his videotape, they could hardly wriggle out. The 408 00:30:30,410 --> 00:30:33,370 Speaker 1: other two corners of the two by two matrix are 409 00:30:33,490 --> 00:30:37,770 Speaker 1: more ambiguous. Giving Tesco club card points to banana man 410 00:30:37,970 --> 00:30:41,450 Speaker 1: was a trivial expense, but nobody would have cared much 411 00:30:41,490 --> 00:30:45,290 Speaker 1: if they'd refused. The financial stakes were low, and so 412 00:30:45,410 --> 00:30:48,410 Speaker 1: were the publicity stakes. It could have gone either way. 413 00:30:48,930 --> 00:30:54,410 Speaker 1: Tesco's one crate banana limit seems a reasonable compromise. It 414 00:30:54,410 --> 00:30:57,730 Speaker 1: can also go either way when both stakes are high. 415 00:30:58,170 --> 00:31:02,650 Speaker 1: That's why some Hoover buyers got their flights and some didn't. 416 00:31:03,410 --> 00:31:07,170 Speaker 1: It was the worst possible combination for any company. They 417 00:31:07,210 --> 00:31:10,210 Speaker 1: looked awful for trying to wriggle out of their own promises, 418 00:31:10,610 --> 00:31:14,410 Speaker 1: and those they were forced to keep were ruinously expensive. 419 00:31:15,610 --> 00:31:20,090 Speaker 1: But perhaps Hoovers marketers had always had their doubts deep down. 420 00:31:20,890 --> 00:31:25,130 Speaker 1: The tagline for their free flights campaign was two return 421 00:31:25,250 --> 00:31:33,250 Speaker 1: seats Unbelievable. In the Philippines, number fever left the three 422 00:31:33,370 --> 00:31:38,730 Speaker 1: four nine bottletop holders facing their own pragmatic calculation. Take 423 00:31:38,930 --> 00:31:46,690 Speaker 1: Pepsi's goodwill twenty dollars or fight. Fifteen thousand Filipinos joined 424 00:31:46,730 --> 00:31:50,650 Speaker 1: a pressure group called Coalition three four nine, set up 425 00:31:50,690 --> 00:31:54,890 Speaker 1: by Vicente Delfiero junior, a public relations consultant and a 426 00:31:54,970 --> 00:31:59,570 Speaker 1: fiery preacher. Mister Delfierro flew to New York to file 427 00:31:59,730 --> 00:32:04,690 Speaker 1: yet another lawsuit against Pepsi, modestly describing himself as a 428 00:32:04,850 --> 00:32:09,010 Speaker 1: Philippino or Don Quixote, a biblical David growing up again 429 00:32:09,170 --> 00:32:14,490 Speaker 1: Stagg Global Goliath. The Pepsi three for nine fiasco mirrors 430 00:32:14,530 --> 00:32:22,850 Speaker 1: how irresponsible multinational organizations abuse consumers in developing countries. Vicente 431 00:32:22,930 --> 00:32:26,810 Speaker 1: del Piero was tapping into a sense of injustice that 432 00:32:26,930 --> 00:32:31,890 Speaker 1: runs much deeper than one botched soft drinks promotion. Recall 433 00:32:32,010 --> 00:32:35,450 Speaker 1: what the thought of winning a million pasos had meant 434 00:32:35,650 --> 00:32:39,410 Speaker 1: to Victoria Angelo. You can finish school, we can buy 435 00:32:39,410 --> 00:32:46,050 Speaker 1: a real house. These shouldn't be unrealistic ambitions for anyone. 436 00:32:47,050 --> 00:32:50,730 Speaker 1: But it's hardly Peps's fault that life is so unfair. 437 00:32:51,250 --> 00:32:54,090 Speaker 1: And was it ever really likely that a court would 438 00:32:54,170 --> 00:32:57,530 Speaker 1: make PEPSI pay a sum that was almost its entire 439 00:32:57,610 --> 00:33:02,650 Speaker 1: market value? Remember, nearly half a million bottletop holders had 440 00:33:02,690 --> 00:33:06,490 Speaker 1: accepted the good will payment, far more than joined mister 441 00:33:06,570 --> 00:33:11,730 Speaker 1: Delfierro's coalition. The aragmatically calculated that this was the most 442 00:33:11,810 --> 00:33:15,890 Speaker 1: PEPSI could reasonably be expected to do after well over 443 00:33:15,930 --> 00:33:21,290 Speaker 1: a decade of legal wrangles, the courts agreed it would 444 00:33:21,330 --> 00:33:25,770 Speaker 1: be wonderful to imagine a bottletop printing error lifting hundreds 445 00:33:25,810 --> 00:33:29,810 Speaker 1: of thousands of Filipinos out of poverty. That that was 446 00:33:29,970 --> 00:33:41,050 Speaker 1: always going to be too good to be true. Key 447 00:33:41,090 --> 00:33:44,970 Speaker 1: sources for this episode include reporting from the Los Angeles Times, 448 00:33:45,050 --> 00:33:48,730 Speaker 1: the BBC, and The Independent, and a paper on consumer 449 00:33:48,810 --> 00:33:52,090 Speaker 1: rebates in the Stamford Journal of Law, Business and Finance. 450 00:33:52,490 --> 00:33:57,730 Speaker 1: For a full list of references, see Tim Harford dot com. 451 00:33:57,930 --> 00:34:01,730 Speaker 1: Cautionary Tales is written by me Tim Harford with Andrew Wright. 452 00:34:02,090 --> 00:34:05,570 Speaker 1: It's produced by Ryan Dilley and Marilyn Rust. The sound 453 00:34:05,610 --> 00:34:08,930 Speaker 1: design and original music is the work of Pascal Wise. 454 00:34:09,690 --> 00:34:13,890 Speaker 1: Julia Barton edited the scripts. Starring in this series of 455 00:34:13,970 --> 00:34:19,930 Speaker 1: Cautionary Tales Helena Bonham, Carter and Jeffrey Wright, alongside Nazzar Elderazzi, 456 00:34:20,530 --> 00:34:27,010 Speaker 1: Ed Gochen, Melanie Gutteridge, Rachel Hanshaw, copnaholbrook Smith, Greg Lockett, 457 00:34:27,370 --> 00:34:31,850 Speaker 1: Messiah Munroe and Rufleus Wright. This show wouldn't have been 458 00:34:31,890 --> 00:34:36,210 Speaker 1: possible without the work of mil LaBelle, Jacob Weisberg, Heather Fane, 459 00:34:36,570 --> 00:34:42,370 Speaker 1: John Schnarz, Carlin mcgliory, Eric Sandler, Emily Rostick, Maggie Taylor 460 00:34:42,770 --> 00:34:48,010 Speaker 1: and Yellow Lakhan and Maya Kanick. Cautionary Tales is a 461 00:34:48,090 --> 00:34:52,810 Speaker 1: production of Pushkin Industries. If you like the show, please 462 00:34:52,850 --> 00:34:55,890 Speaker 1: remember to rate, share, and review.