Bulk purchases
Posted by aogSunday, 13 July 2008 at 15:52 TrackBack Ping URL

Here’s a psychological puzzle for you —

I have been looking at Kapla blocks to extend our current collection because the kids have been enjoying them a lot the last couple of weeks. They’re a bit pricey, roughly 30¢ per block (not that Lego™ is much cheaper). The odd thing is that I will probably buy a bulk set at that price but if I saw a vending machine that wanted 25¢ per block, I’d probably laugh at the idea. Is it just that the larger amount is enough beyond an intuitive feel that it doesn’t seem so much? Or that it’s elevated to a different class of purchase (e.g., serious vs. disposable)? Is it the conceptual repetition (i.e., I would have to put in a lot of quarters to get a useful number of planks)? Is it odd to have this irrationality, or am I odd for thinking it’s odd?

Comments — Formatting by Textile
Ali Choudhury Monday, 14 July 2008 at 06:19

Repeated cash purchases cause psychic pain, even if they are small.

Melissa Monday, 14 July 2008 at 13:41

My kids love the Kapla blocks and we will also probably get more. I like the fact they are safe, eco-friendly and incredibly durable.

We got the 1000 piece box from Landbridge Toys.

Richard Monday, 14 July 2008 at 13:59

Check out KEVA planks which cost a few cents less and are made from maple in the USA. Same size and shape. We like them- but then we are the manufacturer of KEVA planks. The cost is high because of the ultra high precision nature of this type of block. However, the cost per hour used is low.

KEVA Planks

Happy building.

Annoying Old Guy Monday, 14 July 2008 at 15:16

Clearly, I should write about kid’s toys more often.

We have the 280 piece set, which is nice but they run out too soon for complex constructions. I just ordered a 200 piece set, because it was cheaper per plank that the 1000 piece set (odd, but who am I to not take advantage?) and while a couple of bucks more than KEVA, it had free shipping so that’s a win.

Kapla in action

David Cohen Monday, 14 July 2008 at 16:04

What’s the point of one block? Seems like there’s a clear network effect here and the value of the network effect is at least 5 cents a block.

Robert Arvanitis Monday, 14 July 2008 at 16:06

Excellent insight really. And a case study for the “Economic Naturalist.”

It’s not the annoyance of getting them one at a time. Rather, it’s that we buy into the concept. One block is nearly useless, the utility lies in HAVING several hundred. So a different judgment center snaps into action, and we buy.

I recall some years ago refusing to even consider a Volvo 4-beater: “$10k per cylinder? No way!” Same with shoes. What’s Manolo Blahnik per toe?

Annoying Old Guy Monday, 14 July 2008 at 16:12

Mr. Cohen;

But why shouldn’t I spend 200 quarters to get 200 of them for $50 instead of a 200 bulk pack for $60? I can only see the price difference in terms of transaction costs, but when in real life do you ever see such a pricing situation?

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