1 00:00:15,410 --> 00:00:24,570 Speaker 1: Pushkin. Hello Tim. Here the Cautionary Tales team is taking 2 00:00:24,610 --> 00:00:28,970 Speaker 1: a well earned summer vacation. Here is another classic episode 3 00:00:29,130 --> 00:00:33,490 Speaker 1: from the archives, a tale about Pepsi's disastrous bottle cap 4 00:00:33,530 --> 00:00:36,730 Speaker 1: promotion and a man who bought over a thousand chocolate 5 00:00:36,770 --> 00:00:49,410 Speaker 1: puddings enjoy in a tin roof chack. In a slum 6 00:00:49,530 --> 00:00:54,170 Speaker 1: of Manila, the capital of the Philippines, Victoria Angelo lived 7 00:00:54,170 --> 00:00:58,970 Speaker 1: with her husband Tuinito, and their five children. Tuinito was 8 00:00:59,010 --> 00:01:02,010 Speaker 1: a rickshaw driver. He made around four dollars a day. 9 00:01:02,650 --> 00:01:06,210 Speaker 1: Life was a daily grind. Hard work alone offered no 10 00:01:06,410 --> 00:01:10,290 Speaker 1: route out of poverty. So when when the Pepsi Cola 11 00:01:10,370 --> 00:01:14,930 Speaker 1: company started a new promotion in nineteen ninety two, Victoria 12 00:01:15,130 --> 00:01:20,330 Speaker 1: took notice. Number fever seemed easy to understand by a 13 00:01:20,330 --> 00:01:23,410 Speaker 1: bottle of Pepsi, and under the bottle cap you'd see 14 00:01:23,410 --> 00:01:27,690 Speaker 1: printed a three digit number and a cash prize amount. 15 00:01:29,330 --> 00:01:33,490 Speaker 1: Every night on the Channel two TV news program, Pepsi 16 00:01:33,530 --> 00:01:36,770 Speaker 1: would announce a winning number. If you had a bottle 17 00:01:36,810 --> 00:01:41,290 Speaker 1: cap with that number, you'd win the amount shown. The 18 00:01:41,370 --> 00:01:45,650 Speaker 1: prizes went up to a million pesos some forty thousand dollars. 19 00:01:46,050 --> 00:01:50,730 Speaker 1: It would take Guanito thirty years to earn that. Victoria 20 00:01:50,770 --> 00:01:55,250 Speaker 1: started buying Pepsi. Every night she watched Channel two for 21 00:01:55,290 --> 00:01:58,010 Speaker 1: the announcement of the winning number, and she checked her 22 00:01:58,170 --> 00:02:04,930 Speaker 1: growing collection of bottle caps, and every night she was disappointed. 23 00:02:06,050 --> 00:02:11,730 Speaker 1: Until one night the televis announced the number three four nine. 24 00:02:12,530 --> 00:02:15,970 Speaker 1: Hold on, Victoria was sure she had a bottle cap 25 00:02:16,130 --> 00:02:19,930 Speaker 1: marked three four nine. Here it is now, what's the 26 00:02:20,010 --> 00:02:26,010 Speaker 1: amount on the cap? One million pesos. You can finish school, 27 00:02:26,770 --> 00:02:29,930 Speaker 1: you can go to college, she told her children. 28 00:02:30,370 --> 00:02:32,290 Speaker 2: We can buy a real house. 29 00:02:33,450 --> 00:02:37,410 Speaker 1: It seemed like a dream come true. But unknown to Victoria, 30 00:02:37,570 --> 00:02:42,890 Speaker 1: something very strange was happening in homes all across the Philippines. 31 00:02:43,290 --> 00:02:47,370 Speaker 1: Exactly the same scene was playing out. Families were watching 32 00:02:47,450 --> 00:02:51,130 Speaker 1: Channel two, checking their collection of bottle caps, discovering that 33 00:02:51,210 --> 00:02:53,690 Speaker 1: they had one printed with three four nine and a 34 00:02:53,730 --> 00:02:59,050 Speaker 1: million peso prize, and celebrating their incredible good fortune. What 35 00:02:59,250 --> 00:03:03,370 Speaker 1: had happened, it's not clear exactly. Instead of printing just 36 00:03:03,610 --> 00:03:06,330 Speaker 1: two bottle caps with three four nine on them, they'd 37 00:03:06,410 --> 00:03:12,810 Speaker 1: accidentally printed hundreds of thousands, and nobody at Pepsi had 38 00:03:12,810 --> 00:03:16,130 Speaker 1: noticed the problem. But three p four nine had just 39 00:03:16,170 --> 00:03:20,690 Speaker 1: been announced as a winning number. Pepsi would notice the 40 00:03:20,690 --> 00:03:26,530 Speaker 1: problem soon enough. I'm Tim Harford and you're listening to 41 00:03:26,690 --> 00:03:53,730 Speaker 1: cautionary tales. In Worcester, England, a physicist called Phil Calcutt 42 00:03:53,890 --> 00:03:57,010 Speaker 1: was doing his regular shop at his local supermarket Tesco. 43 00:03:58,210 --> 00:04:01,290 Speaker 1: As he strolled down the frutile, a special offer caught 44 00:04:01,290 --> 00:04:04,810 Speaker 1: his attention by a bunch of bananas and get twenty 45 00:04:04,850 --> 00:04:09,010 Speaker 1: five Tesco club card points. The bananas cost one pound 46 00:04:09,210 --> 00:04:13,890 Speaker 1: than seventeen pence. The points were worth fivepence each. Mister 47 00:04:13,930 --> 00:04:17,210 Speaker 1: Calcutt did the math. He'd get club card points worth 48 00:04:17,450 --> 00:04:21,290 Speaker 1: eightpence more than the bananas cost. Could that be right? 49 00:04:21,850 --> 00:04:24,890 Speaker 1: He double checked his mental arithmetic. Yes, he'd make a 50 00:04:24,930 --> 00:04:28,010 Speaker 1: profit of eightpence on every bunch of bananas he bought. 51 00:04:28,850 --> 00:04:33,290 Speaker 1: So mister Calcott piled his trolley seven feet high with bananas. 52 00:04:33,730 --> 00:04:36,650 Speaker 1: Then he got another trolley and filled that with bananas too. 53 00:04:38,170 --> 00:04:41,090 Speaker 3: My living room were stacked from floor to ceiling with 54 00:04:41,170 --> 00:04:46,090 Speaker 3: twenty five cases containing around three thousand bananas. But when 55 00:04:46,090 --> 00:04:47,970 Speaker 3: I popped back for some more, they said they would 56 00:04:48,010 --> 00:04:51,410 Speaker 3: only sell me one case, which is quite understandable because 57 00:04:51,450 --> 00:04:53,050 Speaker 3: they seemed to be making a loss on it. 58 00:04:53,610 --> 00:04:57,130 Speaker 1: When he'd redeemed his Tesco club Card points, mister Calcott 59 00:04:57,250 --> 00:05:00,930 Speaker 1: ended up with a profit of twenty five pounds and twelvepence, 60 00:05:01,770 --> 00:05:05,250 Speaker 1: a modest sum, perhaps, but far more valuable was all 61 00:05:05,290 --> 00:05:08,770 Speaker 1: the fun he had distributing free bananas like some comic 62 00:05:08,770 --> 00:05:10,890 Speaker 1: book superhero around his neighborhood. 63 00:05:12,010 --> 00:05:15,010 Speaker 3: Children in the street now shout Banana Man whenever they 64 00:05:15,090 --> 00:05:15,370 Speaker 3: see me. 65 00:05:19,810 --> 00:05:24,970 Speaker 1: Whoever in Tesco's marketing department had proposed that promotion evidently 66 00:05:25,130 --> 00:05:28,330 Speaker 1: hadn't done the math, nor had the manager who signed 67 00:05:28,370 --> 00:05:31,970 Speaker 1: off on it, nor had any of Tesco's millions of 68 00:05:32,010 --> 00:05:39,690 Speaker 1: other customers. Only one man had noticed banana man. Is 69 00:05:39,690 --> 00:05:44,730 Speaker 1: that surprising? Probably not if you're the mathematician John Alan Paulos, 70 00:05:44,810 --> 00:05:49,130 Speaker 1: who wrote the classic book in Numeracy. Pauloss tells the 71 00:05:49,170 --> 00:05:52,090 Speaker 1: story of watching the TV news with a friend, a 72 00:05:52,130 --> 00:05:56,170 Speaker 1: notoriously pedantic friend, the sort who'd correct you for saying 73 00:05:56,490 --> 00:06:01,890 Speaker 1: continuously when you mean continually. The weather forecast came on. 74 00:06:02,410 --> 00:06:06,010 Speaker 4: There's a fifty chance of rain on Saturday and a 75 00:06:06,090 --> 00:06:10,850 Speaker 4: fifty chance on Sunday, so certain to be rain this weekend. 76 00:06:11,770 --> 00:06:13,370 Speaker 1: Paulos turned to his friend. 77 00:06:14,170 --> 00:06:16,210 Speaker 5: Did you hear that? How embarrassing? 78 00:06:16,850 --> 00:06:21,530 Speaker 1: What was I'm sure you've noticed the forecast's mistake In fact, 79 00:06:21,570 --> 00:06:24,290 Speaker 1: there's a one in four chance of no rain, the 80 00:06:24,330 --> 00:06:28,170 Speaker 1: same probability of flipping a coin twice and getting two tails. 81 00:06:29,170 --> 00:06:31,890 Speaker 1: It's the seventy five percent chance of weekend rain. 82 00:06:32,650 --> 00:06:34,130 Speaker 4: Obviously it is. 83 00:06:34,810 --> 00:06:36,050 Speaker 3: I mean, oh yeah, sure. 84 00:06:36,210 --> 00:06:39,890 Speaker 1: When it comes to numbers, said Paulos. Even the smartest 85 00:06:39,930 --> 00:06:45,170 Speaker 1: among us are unobservant. Companies know that they take advantage 86 00:06:45,210 --> 00:06:48,170 Speaker 1: of it all the time. We see the low monthly 87 00:06:48,250 --> 00:06:51,170 Speaker 1: payment in big type and forget to multiply by the 88 00:06:51,250 --> 00:06:55,090 Speaker 1: number of months we keep paying our monthly gym membership 89 00:06:55,330 --> 00:06:58,450 Speaker 1: instead of dividing it by our monthly visits, and seeing 90 00:06:58,450 --> 00:07:01,490 Speaker 1: we should switch to pay as you go. We buy 91 00:07:01,690 --> 00:07:06,730 Speaker 1: extended warranties on household appliances when some simple probability would 92 00:07:06,730 --> 00:07:11,490 Speaker 1: suggest we should take our chances. Number fever played on 93 00:07:11,570 --> 00:07:15,610 Speaker 1: that numerical laziness. Flip the cap off your bottle of PEPSI, 94 00:07:16,010 --> 00:07:19,010 Speaker 1: see a three digit number and a million payso prize, 95 00:07:19,370 --> 00:07:21,610 Speaker 1: and you might naturally get the impression that you have 96 00:07:21,690 --> 00:07:24,770 Speaker 1: a one in a thousand chance of winning. Not too 97 00:07:24,810 --> 00:07:28,930 Speaker 1: shabby and not true. Of course, Think about it, and 98 00:07:28,970 --> 00:07:32,810 Speaker 1: you'd quickly realize that Pepsi must have printed far more 99 00:07:32,890 --> 00:07:38,210 Speaker 1: losing numbers than winning ones, wouldn't they The true chance 100 00:07:38,250 --> 00:07:41,330 Speaker 1: of winning was vastly smaller than one in a thousand 101 00:07:42,050 --> 00:07:46,290 Speaker 1: and number. When consumers fail to do the sums, we 102 00:07:46,370 --> 00:07:50,370 Speaker 1: get screwed. But what happens when it's the companies that 103 00:07:50,410 --> 00:07:53,970 Speaker 1: mess up? As we'll see, the answer is often that 104 00:07:54,050 --> 00:08:06,210 Speaker 1: consumers still get screwed, often but not always. An engineer 105 00:08:06,250 --> 00:08:11,370 Speaker 1: called David Phillips was shopping in his local suitmarket in Davis, California, 106 00:08:11,770 --> 00:08:15,290 Speaker 1: in nineteen ninety nine. He noticed a new promotion by 107 00:08:15,290 --> 00:08:19,810 Speaker 1: a food brand called Healthy Choice. Send in ten barcodes 108 00:08:19,850 --> 00:08:23,490 Speaker 1: from their products and they'd give you five hundred air miles. 109 00:08:23,930 --> 00:08:26,050 Speaker 1: They'd double it to a thousand if you sent them 110 00:08:26,050 --> 00:08:30,450 Speaker 1: in before a certain deadline. Just like banana man Phil Calcutt, 111 00:08:30,770 --> 00:08:34,330 Speaker 1: mister Phillips paused to do the math. How much is 112 00:08:34,370 --> 00:08:37,770 Speaker 1: an air mile worth? That can vary depending on how 113 00:08:37,810 --> 00:08:41,650 Speaker 1: you redeem them, but Phillips calculated one air mile was 114 00:08:41,730 --> 00:08:45,930 Speaker 1: surely worth at least two cents. His family liked Healthy 115 00:08:46,010 --> 00:08:50,650 Speaker 1: Choice frozen meals, which cost two dollars. Ten frozen meals 116 00:08:51,170 --> 00:08:54,530 Speaker 1: twenty dollars. Send in the barcodes and he'd get a 117 00:08:54,650 --> 00:08:59,170 Speaker 1: thousand air miles also worth at least twenty dollars, who 118 00:08:59,290 --> 00:09:01,770 Speaker 1: said there was no such thing as a free lunch. 119 00:09:02,690 --> 00:09:07,770 Speaker 1: Phillips filled his freezer. Then he thought, what else is 120 00:09:07,810 --> 00:09:11,730 Speaker 1: in the Healthy Choice line? If he could find products 121 00:09:11,730 --> 00:09:14,770 Speaker 1: for cheaper than two dollars, he'd be getting back more 122 00:09:14,850 --> 00:09:17,250 Speaker 1: in air miles than he would spend on the food. 123 00:09:18,330 --> 00:09:20,930 Speaker 1: I found Healthy Choice soups that were less than a 124 00:09:21,010 --> 00:09:26,130 Speaker 1: dollar tin soup perfect, It would keep forever and didn't 125 00:09:26,170 --> 00:09:29,770 Speaker 1: need more freezer space. David bought all the Healthy Choice 126 00:09:29,770 --> 00:09:33,130 Speaker 1: soups in his local supermarket. Then he went to other 127 00:09:33,290 --> 00:09:37,090 Speaker 1: nearby supermarkets and bought all their Healthy Choice soups. Too 128 00:09:37,850 --> 00:09:44,210 Speaker 1: Soon he'd accumulated eight hundred cans of soup. By this point, 129 00:09:44,370 --> 00:09:47,290 Speaker 1: David's wife, Cindy was wondering if this might all be 130 00:09:47,370 --> 00:09:50,290 Speaker 1: a little too good to be true. Are you sure 131 00:09:50,330 --> 00:09:53,010 Speaker 1: you haven't missed something in the small print? Maybe there's 132 00:09:53,010 --> 00:09:56,370 Speaker 1: a limit on how many miles you can claim. David 133 00:09:56,450 --> 00:10:00,130 Speaker 1: poured over the terms and conditions. In return. For every 134 00:10:00,210 --> 00:10:04,370 Speaker 1: ten barcodes and proof of purchase, it said Healthy Choice 135 00:10:04,530 --> 00:10:08,930 Speaker 1: would issue a certificate for air miles. The certificates could 136 00:10:08,930 --> 00:10:12,530 Speaker 1: be redeemed with six different airlines, and while two of 137 00:10:12,570 --> 00:10:16,290 Speaker 1: them did indeed stipulate a limit on how many certificates 138 00:10:16,290 --> 00:10:20,570 Speaker 1: they would redeem, the other four didn't. In fact, the 139 00:10:20,610 --> 00:10:23,210 Speaker 1: offer told consumers to remember there was no limit to 140 00:10:23,210 --> 00:10:26,490 Speaker 1: the number of miles they could earn. With just three 141 00:10:26,530 --> 00:10:30,090 Speaker 1: weeks to go before the deadline, mister Phillips stumbled on 142 00:10:30,130 --> 00:10:36,570 Speaker 1: a startling new opportunity. One supermarket chain grocery outlet had 143 00:10:36,610 --> 00:10:43,530 Speaker 1: started selling Healthy Choice chocolate puddings for just twenty five cents. Remember, 144 00:10:43,850 --> 00:10:47,290 Speaker 1: Healthy Choice was effectively offering air miles worth at least 145 00:10:47,530 --> 00:10:51,130 Speaker 1: two dollars on every one of those puddings. There was 146 00:10:51,170 --> 00:10:54,770 Speaker 1: no time to lose. I drove to about fifteen grocery 147 00:10:54,810 --> 00:10:57,290 Speaker 1: store outlet stores in a weekend. I filled up my 148 00:10:57,370 --> 00:11:00,450 Speaker 1: van with chocolate pudding. After that, I made contact with 149 00:11:00,490 --> 00:11:03,770 Speaker 1: a local grocery store outlet manager had him special order 150 00:11:03,810 --> 00:11:08,730 Speaker 1: me sixty more cases. David Phillips now had over twelve 151 00:11:09,210 --> 00:11:14,690 Speaker 1: thousand chocolate puddings and a problem. Two problems. In fact, 152 00:11:15,210 --> 00:11:19,170 Speaker 1: how would his family ever eat all those puddings? The 153 00:11:19,290 --> 00:11:22,770 Speaker 1: second problem was more pressing, how would he manage to 154 00:11:22,850 --> 00:11:29,090 Speaker 1: peel off twelve thousand barcodes in just three weeks. But 155 00:11:29,130 --> 00:11:32,450 Speaker 1: mister Phillips was a resourceful man, and he realized he 156 00:11:32,490 --> 00:11:36,890 Speaker 1: could solve both problems at once. He contacted his local 157 00:11:36,930 --> 00:11:40,530 Speaker 1: food bank and offered to donate all the chocolate puddings 158 00:11:40,890 --> 00:11:43,810 Speaker 1: if their volunteers would do him the favor of taking 159 00:11:43,810 --> 00:11:49,170 Speaker 1: off the barcodes for him. They said yes. Phillips meticulously 160 00:11:49,290 --> 00:11:53,170 Speaker 1: organized his barcodes into bundles of ten and filled in 161 00:11:53,210 --> 00:11:56,930 Speaker 1: the claims forms over a thousand of them, enough for 162 00:11:57,090 --> 00:12:01,530 Speaker 1: over a million air miles. That would basically be all 163 00:12:01,610 --> 00:12:05,690 Speaker 1: the long haul holidays his family could ever want. David 164 00:12:05,730 --> 00:12:12,090 Speaker 1: Phillips posted off his barcodes and waited. There was no 165 00:12:12,410 --> 00:12:16,010 Speaker 1: immediate reply from Healthy Choice, but he'd read the small 166 00:12:16,050 --> 00:12:19,170 Speaker 1: print that said it would take six to eight weeks 167 00:12:19,210 --> 00:12:23,090 Speaker 1: for the air mile certificates to arrive. Six weeks past, 168 00:12:24,090 --> 00:12:28,290 Speaker 1: then eight weeks now, Phillips was starting to get worried. 169 00:12:28,890 --> 00:12:32,850 Speaker 1: With still no response from Healthy Choice, he phoned them 170 00:12:32,890 --> 00:12:39,370 Speaker 1: up Disaster. They said they had no record of receiving 171 00:12:39,890 --> 00:12:47,730 Speaker 1: any barcodes from him at all. Cautionary tales will return 172 00:12:48,410 --> 00:13:00,490 Speaker 1: after this message. After Channel two News announced that three 173 00:13:00,610 --> 00:13:03,690 Speaker 1: four nine was the winning number on the Pepsi bottle tops, 174 00:13:04,210 --> 00:13:08,250 Speaker 1: crowds of jubilant customers descended on Pepsi plants to claim 175 00:13:08,290 --> 00:13:14,050 Speaker 1: their prizes. Million It soon became clear that something had 176 00:13:14,090 --> 00:13:18,530 Speaker 1: gone horribly wrong. How much would it cost Pepsi to 177 00:13:18,570 --> 00:13:25,290 Speaker 1: honor all the prizes upwards of fifteen billion dollars. It 178 00:13:25,330 --> 00:13:29,050 Speaker 1: was roughly half the Philippin's gross domestic product. More to 179 00:13:29,090 --> 00:13:32,690 Speaker 1: the point, it was close to the entire market capitalization 180 00:13:33,010 --> 00:13:36,690 Speaker 1: of the Pepsi Corporation, not just in the Philippines, but 181 00:13:36,770 --> 00:13:41,490 Speaker 1: the whole world. There was simply no way that Pepsi 182 00:13:41,530 --> 00:13:45,890 Speaker 1: could afford it. Panicked executives held a crisis meeting at 183 00:13:45,970 --> 00:13:49,770 Speaker 1: three o'clock in the morning. They apologized for the computer glitch. 184 00:13:50,370 --> 00:13:53,330 Speaker 1: They pointed out that every bottle cap also contained a 185 00:13:53,370 --> 00:13:57,210 Speaker 1: security code and explained that this would identify the two 186 00:13:57,290 --> 00:14:00,730 Speaker 1: bottle caps they had intended to be winners, and for 187 00:14:00,810 --> 00:14:03,650 Speaker 1: everyone else with a three four nine bottle top. They 188 00:14:03,690 --> 00:14:07,810 Speaker 1: decided to offer a goodwill payment of five hundred pesos, 189 00:14:08,610 --> 00:14:15,490 Speaker 1: a mere twenty dollars. The bottle tops came flooding in 190 00:14:15,970 --> 00:14:19,410 Speaker 1: four hundred and eighty six thousand, one hundred and seventy 191 00:14:19,450 --> 00:14:24,570 Speaker 1: of them. The goodwill payments cost Pepsi about ten million dollars, 192 00:14:25,050 --> 00:14:28,410 Speaker 1: five times what they'd initially budgeted for the entire Number 193 00:14:28,410 --> 00:14:33,530 Speaker 1: Fever campaign, But it wasn't enough to quell everyone's outrage. 194 00:14:33,570 --> 00:14:36,570 Speaker 1: Thousands of people kept hold of their three four nine 195 00:14:36,610 --> 00:14:41,210 Speaker 1: bottle tops. They'd thought their lives were about to change forever. 196 00:14:42,170 --> 00:14:46,370 Speaker 1: Now they were being offered just twenty dollars. That wasn't 197 00:14:46,370 --> 00:14:50,690 Speaker 1: going to buy their goodwill. They were determined to make 198 00:14:50,770 --> 00:15:00,370 Speaker 1: PEPSI pay. David Phillips was determined two He'd gone to 199 00:15:00,450 --> 00:15:03,930 Speaker 1: all that trouble, buying eight hundred tins of soup and 200 00:15:04,210 --> 00:15:08,930 Speaker 1: twelve thousand chocolate puddings, organizing all the barcodes, filling in 201 00:15:09,090 --> 00:15:12,890 Speaker 1: all the forms, and now he learned that the package 202 00:15:12,970 --> 00:15:16,690 Speaker 1: he had sent to Healthy Choice had apparently gone missing. 203 00:15:17,330 --> 00:15:20,210 Speaker 1: This seemed pretty incredible, given that I mailed the package 204 00:15:20,210 --> 00:15:25,130 Speaker 1: registered and someone on their end signed for the package. 205 00:15:25,250 --> 00:15:29,210 Speaker 1: But would a man as meticulous as David Phillips failed 206 00:15:29,210 --> 00:15:36,250 Speaker 1: to plan for that eventuality Not likely. Phillips had photocopied everything. 207 00:15:36,810 --> 00:15:41,050 Speaker 1: He'd even videotaped himself buying the chocolate puddings and stacking 208 00:15:41,090 --> 00:15:43,090 Speaker 1: them up in his house, just to be on the 209 00:15:43,130 --> 00:15:49,130 Speaker 1: safe side. Presented with this evidence. Healthy Choice quickly caved 210 00:15:50,050 --> 00:15:55,730 Speaker 1: mister Phillips got his air miles. Think for a moment 211 00:15:55,770 --> 00:16:00,570 Speaker 1: about what David Phillips did. He hadn't just done one calculation, 212 00:16:01,170 --> 00:16:03,970 Speaker 1: the numerical one that showed the sums on the chocolate 213 00:16:04,010 --> 00:16:08,250 Speaker 1: puddings didn't add up. He'd made a second kind of calculation, too, 214 00:16:09,250 --> 00:16:13,970 Speaker 1: a pragmatic calculation about how things work in the real world. 215 00:16:14,410 --> 00:16:17,610 Speaker 1: All along, I was somewhat worried that Healthy Choice wouldn't 216 00:16:17,650 --> 00:16:22,130 Speaker 1: honor the deal. Packages do sometimes go missing, It's true, 217 00:16:22,730 --> 00:16:26,130 Speaker 1: so it taken practical steps to make it expensive for 218 00:16:26,210 --> 00:16:30,050 Speaker 1: Healthy Choice to refuse him his air miles, ensuring that 219 00:16:30,130 --> 00:16:32,210 Speaker 1: if the company tried to back out of the deal, 220 00:16:32,690 --> 00:16:37,050 Speaker 1: the media would have a field day with the story. Companies, too, 221 00:16:37,570 --> 00:16:41,890 Speaker 1: make both kinds of calculations about their marketing offers, numerical 222 00:16:42,370 --> 00:16:46,690 Speaker 1: and pragmatic. Sometimes they fall down on the numbers. It 223 00:16:46,770 --> 00:16:50,650 Speaker 1: makes no sense to pay shoppers to buy bananas, But 224 00:16:50,850 --> 00:16:54,290 Speaker 1: on some marketing offers, they know the numbers wouldn't add 225 00:16:54,370 --> 00:16:57,210 Speaker 1: up if everyone took advantage, and they rely on the 226 00:16:57,250 --> 00:17:02,890 Speaker 1: pragmatic calculation that many customers won't bother. That's what's happening 227 00:17:02,930 --> 00:17:07,610 Speaker 1: when retailers offer rebates on a purchase. Rather than simply 228 00:17:07,650 --> 00:17:11,610 Speaker 1: reduce the price, they make you pay full price, then 229 00:17:11,770 --> 00:17:15,050 Speaker 1: mail off the receipt or the barcode to claim your rebate. 230 00:17:15,690 --> 00:17:19,690 Speaker 1: Whether such promotions pay off depends on what proportion of 231 00:17:19,770 --> 00:17:24,130 Speaker 1: customers actually do claim. There's even a term of art 232 00:17:24,250 --> 00:17:27,410 Speaker 1: for the percentage of consumers who fail to follow through 233 00:17:28,090 --> 00:17:33,850 Speaker 1: the breakage rate. Marketing professors Tim Silk and Chris Yanishevski 234 00:17:34,170 --> 00:17:38,090 Speaker 1: study the factors that affect breakage rates. There are principles 235 00:17:38,090 --> 00:17:43,530 Speaker 1: from psychology textbooks, such as hyperbolic discounting. That's the tendency 236 00:17:43,570 --> 00:17:47,810 Speaker 1: to put higher value on more immediate rewards. Promise a rebate, 237 00:17:47,930 --> 00:17:51,610 Speaker 1: check quickly and you'll motivate people to apply. Promise it 238 00:17:51,690 --> 00:17:54,570 Speaker 1: in six to eight weeks, and maybe they won't bother 239 00:17:55,490 --> 00:17:59,530 Speaker 1: then there are sneaky little tricks putting the barcode on tough, 240 00:17:59,770 --> 00:18:04,530 Speaker 1: thick cardboard that's hard to cut with household scissors. Increasing 241 00:18:04,570 --> 00:18:09,690 Speaker 1: the breakage rate is a serious and cynical business. When 242 00:18:09,690 --> 00:18:13,010 Speaker 1: the UK branch of Hoover launched a big new promotion 243 00:18:13,170 --> 00:18:17,370 Speaker 1: in nineteen ninety two, they gambled on a high breakage rate. 244 00:18:18,330 --> 00:18:21,810 Speaker 1: They were offering two free flights to Europe to anyone 245 00:18:21,810 --> 00:18:25,370 Speaker 1: who spent one hundred pounds on a Hoover appliance. That's 246 00:18:25,410 --> 00:18:29,370 Speaker 1: about two hundred and fifty dollars in today's money. It's 247 00:18:29,490 --> 00:18:32,850 Speaker 1: not a bad deal at all. In fact, it's such 248 00:18:32,850 --> 00:18:35,330 Speaker 1: a good deal that Hoover knew they couldn't afford for 249 00:18:35,410 --> 00:18:38,650 Speaker 1: too many customers to take up the offer, so they 250 00:18:38,690 --> 00:18:42,210 Speaker 1: made it logistically difficult. You had to snail mail the 251 00:18:42,250 --> 00:18:45,210 Speaker 1: receipt for the item you'd purchased and wait for Hoover 252 00:18:45,290 --> 00:18:47,970 Speaker 1: to send you a form, fill that in, and wait 253 00:18:47,970 --> 00:18:50,370 Speaker 1: for Hoover to send you a voucher. Then you had 254 00:18:50,410 --> 00:18:53,890 Speaker 1: to choose three possible dates and destinations and wait for 255 00:18:53,930 --> 00:18:56,250 Speaker 1: Hoover to let you know if any of them were available, 256 00:18:57,010 --> 00:19:03,650 Speaker 1: and on and on. Only the most determined customers had 257 00:19:03,650 --> 00:19:06,730 Speaker 1: the patience to persevere to the point where they actually 258 00:19:06,730 --> 00:19:09,730 Speaker 1: got on a plane. It looks like who managed to 259 00:19:09,810 --> 00:19:13,130 Speaker 1: keep the breakage rate high enough to make their giveaway 260 00:19:13,170 --> 00:19:19,050 Speaker 1: deal profitable. Then Hoover became over confident they decided to 261 00:19:19,090 --> 00:19:23,690 Speaker 1: expand the offer to include flights to America. This was 262 00:19:23,730 --> 00:19:28,010 Speaker 1: a much bigger incentive. Two return flights from Britain to 263 00:19:28,050 --> 00:19:31,650 Speaker 1: America cost about five times the price of a Hoover 264 00:19:31,770 --> 00:19:37,410 Speaker 1: vacuum cleaner, and Hoover's pragmatic calculation about breakage was way 265 00:19:37,450 --> 00:19:42,770 Speaker 1: off beam Far more people applied for flights than they'd expected. Crucially, 266 00:19:43,050 --> 00:19:47,770 Speaker 1: the applicants also proved far more tenacious than Hoover had hoped. 267 00:19:48,730 --> 00:19:52,810 Speaker 1: Many initially heard nothing back. When they followed up, Hoover 268 00:19:52,890 --> 00:19:55,890 Speaker 1: said their application forms must have been lost in the post. 269 00:19:56,970 --> 00:20:03,250 Speaker 1: They became prostrated and suspicious. David Dixon, a horse trainer 270 00:20:03,290 --> 00:20:07,010 Speaker 1: in Cumbria, was among the disgruntled customers who'd bought a 271 00:20:07,090 --> 00:20:10,730 Speaker 1: Hoover appliance a washing machine in his case, and then 272 00:20:10,850 --> 00:20:14,090 Speaker 1: had trouble claiming his free flights to America. I have 273 00:20:14,290 --> 00:20:17,690 Speaker 1: fucked them, I have written of them, I have formed them, 274 00:20:18,210 --> 00:20:22,210 Speaker 1: And then, to add insult to injury, his washing machine 275 00:20:22,250 --> 00:20:27,450 Speaker 1: broke down. Hoover sent a technician who failed to sympathize 276 00:20:27,450 --> 00:20:31,450 Speaker 1: with mister Dixon's plight. According to the technician, the offer 277 00:20:31,610 --> 00:20:34,530 Speaker 1: was obviously too good to be true. Mister Dixon should 278 00:20:34,570 --> 00:20:37,130 Speaker 1: surely have realized there must be some kind of catch. 279 00:20:37,490 --> 00:20:39,450 Speaker 3: If do you think bang a washing machine's going to 280 00:20:39,530 --> 00:20:41,530 Speaker 3: get you two tickets to America. 281 00:20:41,810 --> 00:20:46,250 Speaker 1: You must be an idiot. An idiot, eh, we'll see 282 00:20:46,250 --> 00:20:50,050 Speaker 1: about that. While the technician was fixing his washing machine, 283 00:20:50,370 --> 00:20:53,130 Speaker 1: mister Dixon drove his horse box in front of the 284 00:20:53,170 --> 00:20:57,850 Speaker 1: Hoover truck, blocking it in. He told the technician to 285 00:20:57,970 --> 00:21:01,250 Speaker 1: walk home and pass on a message to his employers. Well, 286 00:21:01,290 --> 00:21:05,930 Speaker 1: I'll get me tickets, they'll get their vun Mister Dixon 287 00:21:05,970 --> 00:21:10,810 Speaker 1: became something of a folk hero. The BBC meanwhile sent 288 00:21:10,890 --> 00:21:15,370 Speaker 1: an undercover reporter to investigate what was going on. She 289 00:21:15,450 --> 00:21:17,890 Speaker 1: got a job in the agency that was processing the 290 00:21:17,930 --> 00:21:21,890 Speaker 1: applications for free flights on Hoover's behalf. It went something 291 00:21:21,930 --> 00:21:24,730 Speaker 1: like this, So what would you like me to do. 292 00:21:25,290 --> 00:21:26,410 Speaker 1: Here's a list of people. 293 00:21:26,570 --> 00:21:28,690 Speaker 3: Contact them and offer them flights from London. 294 00:21:29,730 --> 00:21:32,530 Speaker 2: These people all live in Glasgow. That's four hundred miles 295 00:21:32,530 --> 00:21:33,090 Speaker 2: from London. 296 00:21:33,330 --> 00:21:33,810 Speaker 1: That's right. 297 00:21:35,090 --> 00:21:37,410 Speaker 2: But the person sitting next to me is phoning people 298 00:21:37,410 --> 00:21:39,530 Speaker 2: who live in London and telling them we can only 299 00:21:39,570 --> 00:21:41,410 Speaker 2: offer them flights from Glasgow. 300 00:21:41,930 --> 00:21:43,290 Speaker 3: You get you on fast love. 301 00:21:44,530 --> 00:21:48,930 Speaker 1: When the BBC investigation was broadcast, it did not play 302 00:21:48,970 --> 00:21:54,890 Speaker 1: well for Hoover. They eventually begrudgingly bought over two hundred 303 00:21:55,170 --> 00:21:59,130 Speaker 1: thousand flights at a cost of over seventy million dollars. 304 00:21:59,570 --> 00:22:03,650 Speaker 1: The majority of customers had given up without getting their flights, 305 00:22:03,970 --> 00:22:07,650 Speaker 1: but the company's reputation had taken a hit, so had 306 00:22:07,650 --> 00:22:11,570 Speaker 1: their market share in the UK. Part of the problem 307 00:22:11,690 --> 00:22:15,090 Speaker 1: was that anyone who wanted a Hoover appliance could find 308 00:22:15,330 --> 00:22:19,810 Speaker 1: plenty of attractive deals in the classified ads never used 309 00:22:20,330 --> 00:22:24,290 Speaker 1: still in their original packaging, people had bought them just 310 00:22:24,330 --> 00:22:25,570 Speaker 1: to get the air tickets. 311 00:22:26,290 --> 00:22:26,850 Speaker 5: No wonder. 312 00:22:26,890 --> 00:22:30,930 Speaker 1: Hoover's parent company fired the executives who'd approved the promotion 313 00:22:31,570 --> 00:22:34,770 Speaker 1: and quietly sold off the European arm of the company 314 00:22:35,250 --> 00:22:40,890 Speaker 1: for a knockdown price. For Pepsi executives in the Philippines, 315 00:22:41,250 --> 00:22:44,850 Speaker 1: merely getting fired might have seemed like a relief compared 316 00:22:44,890 --> 00:22:49,650 Speaker 1: to the continuing disaster of number fever. They were getting 317 00:22:49,690 --> 00:22:53,450 Speaker 1: so many death threats they needed round the clock security. 318 00:22:53,930 --> 00:22:58,890 Speaker 1: Pepsi erected barbed wire barricades around its processing plants. Dozens 319 00:22:58,890 --> 00:23:03,690 Speaker 1: of its trucks were attacked. In one tragic case, a 320 00:23:03,730 --> 00:23:07,930 Speaker 1: grenade thrown at a Pepsi truck in Manila bounced off 321 00:23:08,370 --> 00:23:11,370 Speaker 1: and killed a school teacher and a five year old girl. 322 00:23:13,010 --> 00:23:16,290 Speaker 1: The small print of the number fever adverts did mention 323 00:23:16,450 --> 00:23:19,290 Speaker 1: the existence of a security code on the bottle tops, 324 00:23:19,610 --> 00:23:23,050 Speaker 1: but was it sufficiently clear that the prize depended on 325 00:23:23,130 --> 00:23:26,490 Speaker 1: the security code, not just on the three digit number. 326 00:23:27,490 --> 00:23:37,370 Speaker 1: Pepsi found itself fighting thousands of lawsuits after this message 327 00:23:37,730 --> 00:23:46,250 Speaker 1: cautionary tales will return, even as the number fever lawsuits 328 00:23:46,330 --> 00:23:50,850 Speaker 1: raged on. Pepsi found itself once again in a numerical 329 00:23:50,890 --> 00:23:57,170 Speaker 1: dispute described in Matt Parker's book of mathematical mishaps, Humble Pie. 330 00:23:57,250 --> 00:24:02,370 Speaker 1: This dispute followed yet another promotion called Pepsi Points, this 331 00:24:02,570 --> 00:24:07,090 Speaker 1: time running in the United States. A thirty second advert 332 00:24:07,250 --> 00:24:11,970 Speaker 1: starts with the caption Monday, seven fifty eight am and 333 00:24:12,050 --> 00:24:16,050 Speaker 1: an external shot of an ordinary suburban house. Cut to 334 00:24:16,130 --> 00:24:19,010 Speaker 1: the inside of the house. A cool young dude is 335 00:24:19,050 --> 00:24:22,290 Speaker 1: wearing a T shirt with a Pepsi logo. He slicks 336 00:24:22,330 --> 00:24:27,290 Speaker 1: back his hair, T shirt seventy five Pepsi points, flashes 337 00:24:27,330 --> 00:24:31,570 Speaker 1: the on screen caption. He dons a leather jacket. Leather 338 00:24:31,650 --> 00:24:35,930 Speaker 1: jacket fourteen hundred and fifty Pepsi points on go the 339 00:24:36,010 --> 00:24:40,850 Speaker 1: sunglasses one hundred and seventy five Pepsi points. Then a 340 00:24:40,970 --> 00:24:41,930 Speaker 1: voiceover he. 341 00:24:41,970 --> 00:24:46,450 Speaker 4: Introduced on you pepsy Stuff chattle are Now the more 342 00:24:46,490 --> 00:24:49,450 Speaker 4: pepsi you drinks are more great stuff you're going to get. 343 00:24:51,570 --> 00:24:56,490 Speaker 1: Meanwhile, on screen, there's a school classroom. From outside, there's 344 00:24:56,530 --> 00:24:59,810 Speaker 1: some kind of loud noise and strong wind blowing books 345 00:24:59,810 --> 00:25:03,970 Speaker 1: and papers everywhere. Other students watch in amazement as the 346 00:25:04,050 --> 00:25:08,410 Speaker 1: cool dude arrives in a Harrier jump jet doing a 347 00:25:08,490 --> 00:25:12,610 Speaker 1: vertical land in the school yard. He steps out sipping 348 00:25:12,650 --> 00:25:18,770 Speaker 1: a can of pepsi, and on screen Harrier Fighter seven 349 00:25:19,170 --> 00:25:28,290 Speaker 1: million pepsi points. Sure be the bus? Ah, yes, very good? 350 00:25:28,690 --> 00:25:32,010 Speaker 1: But hold on, has anyone done the math on this? 351 00:25:33,210 --> 00:25:35,690 Speaker 1: A can of pepsi was one point, but once you 352 00:25:35,770 --> 00:25:38,330 Speaker 1: had a few points from Pepsi purchases, you could buy 353 00:25:38,450 --> 00:25:42,490 Speaker 1: additional points for ten cents apiece, So a T shirt 354 00:25:42,530 --> 00:25:46,890 Speaker 1: at seventy five points was effectively seven dollars fifty fair enough, 355 00:25:47,210 --> 00:25:51,370 Speaker 1: a leather jacket one hundred and forty five dollars not unreasonable. 356 00:25:51,930 --> 00:25:56,730 Speaker 1: And a Harrier Fighter, let's see seven million times ten cents, 357 00:25:57,130 --> 00:26:03,290 Speaker 1: that's seven hundred thousand dollars. Doesn't that sound cheap for 358 00:26:03,410 --> 00:26:08,130 Speaker 1: a fighter jet? The US military paid over twenty million 359 00:26:08,210 --> 00:26:12,090 Speaker 1: dollars for each of its AV eight Harrier two jump jets. 360 00:26:12,610 --> 00:26:15,370 Speaker 1: If you could get one from Pepsi for seven hundred 361 00:26:15,410 --> 00:26:24,250 Speaker 1: thousand dollars, that would be an absolute steal. There were 362 00:26:24,250 --> 00:26:28,530 Speaker 1: a few cultures now very rare, whose counting words only 363 00:26:28,610 --> 00:26:34,370 Speaker 1: cover one two big number. But that's because they rarely 364 00:26:34,450 --> 00:26:38,890 Speaker 1: need to talk about large numbers. Modern marketing executives do. 365 00:26:39,650 --> 00:26:43,250 Speaker 1: And yet when it came to the Harrier, Pepsi's decision 366 00:26:43,290 --> 00:26:47,810 Speaker 1: makers were helpless. Once those Pepsi points started mounting up, 367 00:26:48,330 --> 00:26:52,610 Speaker 1: all they could seem to think was big number. Enter 368 00:26:52,770 --> 00:26:57,290 Speaker 1: twenty one year old business student John Leonard. He somehow 369 00:26:57,370 --> 00:27:01,530 Speaker 1: raised seven hundred thousand dollars, which he deposited with a lawyer. 370 00:27:02,290 --> 00:27:05,530 Speaker 1: He bought fifteen cans of Pepsi and sent off his 371 00:27:05,690 --> 00:27:09,650 Speaker 1: fifteen Pepsi points with a check for seven one hundred 372 00:27:09,770 --> 00:27:13,810 Speaker 1: thousand and eight dollars and fifty cents. That was to 373 00:27:13,810 --> 00:27:16,690 Speaker 1: cover the remaining six million, nine hundred and ninety nine 374 00:27:16,730 --> 00:27:20,450 Speaker 1: thou nine hundred and eighty five Pepsi points plus the 375 00:27:20,610 --> 00:27:26,010 Speaker 1: ten dollars delivery charge. Pepsi wrote back, politely. 376 00:27:26,410 --> 00:27:28,850 Speaker 2: The item that you have requested is not included in 377 00:27:28,890 --> 00:27:31,810 Speaker 2: the catalog or on the order form. The Harrier jet 378 00:27:31,850 --> 00:27:35,570 Speaker 2: and the Pepsi commercial is fanciful. We apologize for any 379 00:27:35,610 --> 00:27:38,290 Speaker 2: misunderstanding or confusion that you may have experienced. 380 00:27:39,530 --> 00:27:42,850 Speaker 1: Mister Leonard had his lawyer swing into action. 381 00:27:43,650 --> 00:27:48,130 Speaker 4: Your letter of May seven, nineteen ninety six is totally unacceptable. 382 00:27:48,450 --> 00:27:51,730 Speaker 4: We have reviewed the videotape at the Pepsi stuff commercial 383 00:27:52,010 --> 00:27:55,850 Speaker 4: and it clearly offers the new Harriet jet for seven 384 00:27:56,170 --> 00:28:00,770 Speaker 4: million Pepsi points. This is a formal demand that you 385 00:28:00,970 --> 00:28:05,690 Speaker 4: on ayach commitment and make immediate arrangements to transfer the 386 00:28:05,850 --> 00:28:08,890 Speaker 4: new Harriot Jet to our client. 387 00:28:09,650 --> 00:28:13,250 Speaker 1: The case went to court, where District Judge kimber Wood 388 00:28:13,530 --> 00:28:17,570 Speaker 1: had to decide if the advert was serious. She came 389 00:28:17,610 --> 00:28:20,690 Speaker 1: to the understandable conclusion that it wasn't. 390 00:28:21,410 --> 00:28:25,890 Speaker 6: The callow youth featured in the commercial is a highly 391 00:28:26,010 --> 00:28:31,850 Speaker 6: improbable pilot. The teenager's comment that flying a Harrier Jet 392 00:28:31,890 --> 00:28:37,930 Speaker 6: to school sure beats the bus evinces an improbably insussient 393 00:28:38,130 --> 00:28:43,690 Speaker 6: attitude toward the relative difficulty and danger of piloting a 394 00:28:43,690 --> 00:28:48,090 Speaker 6: fighter plane in a residential area as opposed to taking 395 00:28:48,370 --> 00:28:49,610 Speaker 6: public transportation. 396 00:28:50,410 --> 00:28:54,050 Speaker 1: Might some other court take a different view? Probably not, 397 00:28:54,770 --> 00:28:58,450 Speaker 1: But Pepsi decided to edit its commercial just in case. 398 00:28:59,330 --> 00:29:05,570 Speaker 1: Harrier now cost seven hundred million Pepsi points. Again big number, 399 00:29:06,290 --> 00:29:12,650 Speaker 1: but this time big enough. I assume John Leonard knew 400 00:29:12,650 --> 00:29:15,290 Speaker 1: that his chance of winning the case was small, and 401 00:29:15,290 --> 00:29:18,010 Speaker 1: that if he lost, there'd be lawyer's fees to pay. 402 00:29:18,770 --> 00:29:23,050 Speaker 1: It must have been a calculated gamble. Judge Kimberwood summed 403 00:29:23,130 --> 00:29:25,490 Speaker 1: up why she wasn't letting that gamble pay off. 404 00:29:26,170 --> 00:29:31,730 Speaker 6: An objective reasonable person would conclude that purchasing a fighter 405 00:29:31,810 --> 00:29:36,530 Speaker 6: plane for seven hundred thousand dollars is a deal too 406 00:29:36,650 --> 00:29:38,530 Speaker 6: good to be true? 407 00:29:38,730 --> 00:29:42,970 Speaker 1: Fair enough, But can we predict if a corporate marketing 408 00:29:43,010 --> 00:29:46,170 Speaker 1: bungle is likely to have a happy ending? Can we 409 00:29:46,290 --> 00:29:48,890 Speaker 1: come up with a taxonomy of the too good to 410 00:29:48,890 --> 00:29:54,210 Speaker 1: be true from these stories? Perhaps we can. It's all 411 00:29:54,250 --> 00:29:58,810 Speaker 1: about that pragmatic calculation. Imagine, if you will a tool 412 00:29:58,930 --> 00:30:03,210 Speaker 1: beloved by marketing types, a two by two matrix, how 413 00:30:03,290 --> 00:30:05,890 Speaker 1: much will it cost the company to pay up and 414 00:30:06,010 --> 00:30:08,450 Speaker 1: how bad will it make the company look to wriggle 415 00:30:08,530 --> 00:30:14,210 Speaker 1: out In one corner? Expensive promises with an easy get out. 416 00:30:15,010 --> 00:30:17,850 Speaker 1: In this corner is John Leonard with his video of 417 00:30:17,890 --> 00:30:22,210 Speaker 1: the Pepsi staff ad Harrier jets are expensive and did 418 00:30:22,250 --> 00:30:26,130 Speaker 1: it make Pepsi look unreasonable to fight the case, not really. 419 00:30:27,290 --> 00:30:31,450 Speaker 1: At the other extreme cheap promises with no means of escape, 420 00:30:32,290 --> 00:30:36,490 Speaker 1: here stands David Phillips with his stack of chocolate puddings. 421 00:30:37,170 --> 00:30:41,090 Speaker 1: Giving one customer a pile of air miles wasn't especially 422 00:30:41,130 --> 00:30:45,650 Speaker 1: expensive set against the entire healthy Choice marketing campaign, and 423 00:30:46,370 --> 00:30:50,450 Speaker 1: thanks to his videotape, they could hardly wriggle out. The 424 00:30:50,570 --> 00:30:53,530 Speaker 1: other two corners of the two by two matrix are 425 00:30:53,650 --> 00:30:57,970 Speaker 1: more ambiguous. Giving Tesco club card points to banana man 426 00:30:58,130 --> 00:31:01,570 Speaker 1: was a trivial expense, but nobody would have cared much 427 00:31:01,610 --> 00:31:05,410 Speaker 1: if they'd refused. The financial stakes were low, and so 428 00:31:05,570 --> 00:31:08,490 Speaker 1: were the publicity stakes. It could have gone either way. 429 00:31:09,170 --> 00:31:14,570 Speaker 1: Tesco's one crate banana limit seems a reasonable compromise. It 430 00:31:14,570 --> 00:31:17,490 Speaker 1: can also go either way when both stakes are high. 431 00:31:18,330 --> 00:31:22,770 Speaker 1: That's why some Hoover buyers got their flights and some didn't. 432 00:31:23,610 --> 00:31:27,330 Speaker 1: It was the worst possible combination for any company. They 433 00:31:27,330 --> 00:31:30,330 Speaker 1: looked awful for trying to wriggle out of their own promises, 434 00:31:30,810 --> 00:31:34,570 Speaker 1: and those they were forced to keep were ruinously expensive. 435 00:31:35,810 --> 00:31:40,250 Speaker 1: But perhaps Hoover's marketers had always had their doubts deep down. 436 00:31:41,090 --> 00:31:45,810 Speaker 1: The tagline for their free flights campaign was two return seats. 437 00:31:46,610 --> 00:31:53,730 Speaker 1: Unbelievable in the Philippines. Number fever left the three four 438 00:31:53,890 --> 00:31:58,850 Speaker 1: nine bottle top holders facing their own pragmatic calculation. Take 439 00:31:59,050 --> 00:32:06,850 Speaker 1: Pepsi's goodwill twenty dollars or fight. Fifteen thousand Filipinos joined 440 00:32:06,890 --> 00:32:11,570 Speaker 1: a pressure group called Coalition three, set up by Vicente 441 00:32:11,610 --> 00:32:16,130 Speaker 1: Delfiero Junior, a public relations consultant and a fiery preacher. 442 00:32:16,850 --> 00:32:20,650 Speaker 1: Mister Delfiero flew to New York to file yet another 443 00:32:20,770 --> 00:32:24,810 Speaker 1: lawsuit against Pepsi, modestly describing himself as. 444 00:32:24,850 --> 00:32:29,410 Speaker 5: A Filipino Don Quixote, a Biblical David going up against 445 00:32:29,410 --> 00:32:33,090 Speaker 5: a global Golaiad. He drew sneers and laughs from the 446 00:32:33,170 --> 00:32:38,490 Speaker 5: appity New Yorkers, but he remained undonted and fearless. The 447 00:32:38,610 --> 00:32:44,850 Speaker 5: Pepsi three four nine fiasco mirrors how irresponsible multinational organizations 448 00:32:45,250 --> 00:32:47,970 Speaker 5: abuse consumers in developing countries. 449 00:32:50,530 --> 00:32:54,930 Speaker 1: Vicente Delfiero was tapping into a sense of injustice that 450 00:32:55,050 --> 00:33:00,050 Speaker 1: runs much deeper than one botched soft drinks promotion. Recall 451 00:33:00,170 --> 00:33:03,530 Speaker 1: what the thought of winning a million pesos had meant 452 00:33:03,850 --> 00:33:07,570 Speaker 1: to Victoria Angelo. You can finish school, we can buy 453 00:33:07,650 --> 00:33:15,290 Speaker 1: real house. These shouldn't be unrealistic ambitions for anyone. But 454 00:33:15,530 --> 00:33:19,610 Speaker 1: it's hardly Pepsi's fault that life is so unfair, And 455 00:33:19,890 --> 00:33:22,570 Speaker 1: was it ever really likely that a court would make 456 00:33:22,730 --> 00:33:27,610 Speaker 1: PEPSI pay a sum that was almost its entire market value? Remember, 457 00:33:28,250 --> 00:33:32,010 Speaker 1: nearly half a million bottletop holders had accepted the good 458 00:33:32,090 --> 00:33:36,050 Speaker 1: will payment, far more than joined mister del Fierro's coalition. 459 00:33:36,650 --> 00:33:40,650 Speaker 1: They'd pragmatically calculated that this was the most PEPSI could 460 00:33:40,690 --> 00:33:44,770 Speaker 1: reasonably be expected to do after well over a decade 461 00:33:44,770 --> 00:33:50,130 Speaker 1: of legal wrangles. The courts agreed it would be wonderful 462 00:33:50,170 --> 00:33:54,610 Speaker 1: to imagine a bottletop printing error lifting hundreds of thousands 463 00:33:54,650 --> 00:33:58,890 Speaker 1: of Filipinos out of poverty. That that was always going 464 00:33:58,930 --> 00:34:09,930 Speaker 1: to be too good to be true. Key sources for 465 00:34:10,010 --> 00:34:13,730 Speaker 1: this episode include reporting from the Los Angeles Times, the BBC, 466 00:34:14,170 --> 00:34:17,650 Speaker 1: and The Independent, and a paper on consumer rebates in 467 00:34:17,690 --> 00:34:20,930 Speaker 1: the Stamford Journal of Law, Business and Finance. For a 468 00:34:20,970 --> 00:34:26,650 Speaker 1: full list of references, see Tim Harford dot com. Cautionary 469 00:34:26,690 --> 00:34:29,930 Speaker 1: Tales is written by me Tim Harford with Andrew Wright. 470 00:34:30,290 --> 00:34:33,690 Speaker 1: It's produced by Ryan Dilley and Marilyn Rust. The sound 471 00:34:33,770 --> 00:34:37,170 Speaker 1: design and original music is the work of Pascal Wise. 472 00:34:37,810 --> 00:34:42,050 Speaker 1: Julia Barton edited the scripts. Starring in this series of 473 00:34:42,170 --> 00:34:46,810 Speaker 1: Cautionary Tales a Helena Bonham Carter and Jeffrey Wright, alongside 474 00:34:46,930 --> 00:34:53,730 Speaker 1: Nizzar Eldazi, Ed Gochen, Melanie Gutteridge, Rachel Hanshaw, copenaholbrook Smith, 475 00:34:54,330 --> 00:34:59,850 Speaker 1: Greg Lockett, Messeamunroe and Rufus Wright. This show wouldn't have 476 00:34:59,890 --> 00:35:03,410 Speaker 1: been possible without the work of Mea LaBelle, Jacob Weisberg, 477 00:35:03,690 --> 00:35:09,810 Speaker 1: Heather Fane, John Schnaz, Carlin Mgliori, Eric Sandler, Emily Ross, 478 00:35:09,810 --> 00:35:15,450 Speaker 1: Maggie Taylor, Aniela La Khan, and Maya Kanig. Cautionary Tales 479 00:35:16,010 --> 00:35:20,290 Speaker 1: is a production of Pushkin Industries. If you like the show, 480 00:35:20,650 --> 00:35:24,810 Speaker 1: please remember to rate, share, and review.