A testament to our very own irrationalities

Cellphones: we all have them. Have you ever thought about the ridiculous prices that cell phone companies force us to pay? My family pays $80-90 a month for like 1000 minutes and 3 lines or something like that, plus the $10 a month extra that my brother and I add on for only 250 measly text messages each. You know how frequently people text nowadays!? 250 really gets you nowhere, and text messages are essentially costless to a carrier!

Anyway, I digress. The NYTimes recently ran an article on cell phone pricing, a topic which even confuses economists. After all, most businesses want to encourage higher usage of their services by offering lower rates for increased usage, a principle cell phone companies diverge on when they charge huge fees for overage.

I found the psychological effects on consumers due to the pricing models really interesting, though. As the article states, "those high charges for going over your allotted minutes, for example, are designed to cause you enough pain that you will switch to a plan with a higher regular fee." That's actually exactly what happened with my mom, as we went crazily over one month (to the tune of around $200) due to completely unforeseen circumstances, and my mom's upped our plan ever since by $30. We never come close to using all of our minutes.

Some other highlights that I really enjoyed from the article:

• "When companies introduce certain discounts — like Sprint's recent offer of free calling to any mobile number — the effect is that customers often switch to more expensive plans."
• "Americans spend more money each month on their wireless bills than people in any other country." (I would just like to add that our cell phone capabilities are also way behind many other developing nations' like Japan)
• Cingular's introduction of Rollover minutes actually ended up encouraging people to buy larger plans. "It turned out that people were happy to buy extra minutes if they knew they could keep them, rather than having them expire."
• Since people have been texting more and talking less, "revenue from voice plans has fallen 31 percent since peaking in 2003. To fill that hole, the carriers raised the price of a text message from 10 cents to 15 cents, and later to 20 cents. These fees provided nice cash, but as with the voice charges, the main purpose was to persuade customers to subscribe to text-message plans" (they totally got me on that one, which I'm still pretty bitter about)
• And then there's this whole thing on the pricing of the iPhone and how consumers essentially screwed themselves (well, just a little) on it which is also pretty interesting. I'll let you read the article for that part.

Quick Update!

Over the summer NYTimes.com heavily advertising their new "global edition" that they publish with the International Herald Tribune. They were actually pretty obnoxious about it, so much so that every time you'd go to the regular version a bar would pop up asking if you wanted to switch over. So me, the wish-I-was-worldly-but-really-am-not sort of person I am decided to switch over so every time I visited I'd all sorts of international news to keep me well versed in worldly issues. Oh, that and the stupid bar that kept popping up just got annoying and I just wanted it to stop appearing.

Too bad I'm actually quite unworldly. Aaaaand as a result I've barely read NYTimes.com since.

I just switched back after realizing why the site has been so uninteresting to me recently, but man is that a case of advertising gone wrong.

This is sooooo cool

You ever wonder how people spend their day normally? The NYTimes put out this graph depicting what people do on a given day.

Any interesting observations? I didn't really find anything terribly unexpected except for the difference in working and TV & Movie usage between blacks and whites.

http://www.nytimes.com/interactive/2009/07/31/business/20080801-metrics-graphic.html

Man, it's a jungle out there

You know, I knew tech companies competed heavily for market share, but I guess I never thought that their moves were so strategic as shown by these two articles. I wonder, if Google is facing such heavy bombardment from Microsoft and Google, how can afford to keep their motto "Don't Be Evil"? Will they break down and start business practices that internet users may disapprove of heavily? I guess they might've already started that with their behavioral targeting campaign (Wired article).

Oh, by the way, I didn't realize Zuckerberg was such a douche (Wired article again).

http://www.nytimes.com/2009/07/13/opinion/13cringely.html

http://www.wired.com/techbiz/it/magazine/17-07/ff_facebookwall?currentPage=all

Interesting Article on Giving

http://www.nytimes.com/2009/07/09/opinion/09kristof.html?_r=1&partner=rssnyt&emc=rss

A couple quick takeaways:

1) humanitarians are ineffective at selling their causes
2) the public has a distrust in the ways humanitarian groups convey their purpose and why they're needed
3) Stalin was right when he said "The death of one man is a tragedy. The death of millions is a statistic."
4) there's a new book I want to read (shoot).

From Peder Pan, the man who can fly.