Shrinkflation happens when companies keep the price of an overall package the same while reducing the size or quantity of the items in the package. The word is a portmanteau of the words shrink and inflation. The first use of the term is often attributed to Pippa Malmgren. Shrinkflation is a sneaky way to combat…
The numerosity heuristic can ruin your diet. According to numerosity, people pay more attention to the number of units rather than the type of units which leads to faulty conclusions. Research shows we will pay more for a 7-day vacation than a one week vacation, and will complain less about a flight that is delayed for…
Learning about the numerosity heuristic can save you money. As a three-time CEO, I’ve had a lot of experience with incentive stock options and have been appalled by how poorly they are understood by employees. Many employees fixated on the number of shares they were granted, rather than the percentage of shares outstanding. They would multiply their…