the undercover economist - the economic mysteries of daily life.
jumping from article reChechyna..polygamy (bottom of below post) to another installment on Slate of this series: The Undercover Economist appears on Saturdays in the Financial Times Magazine. Tim Harford is a columnist for the Financial Times. His latest book is The Undercover Economist.

The Mystery of the Rude Waiter
Why my favorite restaurant employs such a churlish lout.
re fine restaurant where you can eat the same superb food at the bar for much lower cost, but must tolerate rude service from the barman. Want a nice waiter? Try the dining room.

Something must be done to keep the lobbyists in the full-priced restaurant, and that something is this barman. This sounds odd, but it's not really so unusual. Think of Adobe's Photoshop Elements, a product that is often described as a stripped-down version of the image-processing software Photoshop. It doesn't cost Adobe any more to ship a Photoshop CD than to ship an Elements CD, and stripping out those extra features was surely an additional expense.
Intel introduced two versions of the old 486 computer chip; the cheaper version was the expensive version with some extra work done on the chip to reduce its speed. IBM's LaserWriter E, a low-end laser printer, turned out to be exactly the same piece of equipment as their high-end LaserWriter—except that there was an additional chip in the cheaper version to slow it down. Beyond the high-tech industries, consider multipacks in the big box supermarkets. A manufacturer produces a gigantic pack of 12 four-liter bottles of lemonade at a higher price: It must hire a professional packaging company to bundle them together. As with Intel, IBM, and Adobe, the inferior product costs more to produce. The payoff is simple: It enables retailers to target price increases at shoppers who prefer something easier to carry, even if it is more expensive. And, of course, I have already reported on Starbucks' "short cappuccino," a cheap product so superior to everything else the company sells that they are obliged to obscure its very existence. /?? >

Here's a little secret that Starbucks doesn't want you to know: They will serve you a better, stronger cappuccino if you want one, and they will charge you less for it. Ask for it in any Starbucks and the barista will comply without batting an eye. The drink in question is the elusive "short cappuccino"—at 8 ounces, a third smaller than the smallest size on the official menu, the "tall," and dwarfed by what Starbucks calls the "customer-preferred" size, the "Venti." wait - only the cappucino or can I getany drink as a "short"? I have even said "I wan the small - I guess here that's the tall, huh? " and wait, did they used to have 'short' as one of their regular sizes? and knocked it off the menu! ah you tricksters.
The official line from Starbucks is that there is no room on the menu board, although this doesn't explain why the short cappuccino is also unmentioned on the comprehensive Starbucks Web site, nor why the baristas will serve you in a whisper rather than the usual practice of singing your order to the heavens.
Economics has the answer: This is the Starbucks way of sidestepping a painful dilemma over how high to set prices. Price too low and the margins disappear; too high and the customers do. Any business that is able to charge one price to price-sensitive customers and a higher price to the rest will avoid some of that awkward trade-off.
The difficulty is that if some of your products are cheap, you may lose money from customers who would willingly have paid more. So, businesses try to discourage their more lavish customers from trading down by making their cheap products look or sound unattractive, or, in the case of Starbucks, making the cheap product invisible.
The British supermarket Tesco has a "value" line of products with infamously ugly packaging, not because good designers are unavailable but because the supermarket wants to scare away customers who would willingly spend more. "The bottom end of any market tends to get distorted," says McManus. "The more market power firms have, the less attractive they make the cheaper products."
The practice is hundreds of years old. The French economist Emile Dupuit wrote about the early days of the railways, when third-class carriages were built without roofs, even though roofs were cheap: "What the company is trying to do is prevent the passengers who can pay the second-class fare from traveling third class; it hits the poor, not because it wants to hurt them, but to frighten the rich."
The modern equivalent is the airport departure lounge. Airports could create nicer spaces, but that would frustrate the ability of airlines to charge substantial premiums for club-class departure lounges.

Related in Slate:
In 2004, Daniel Gross addressed how Starbucks gets away with its high prices—addicts crave its higher caffeine kick per cup. Last month, Michael Idov detailed his brief and bitter stint as the owner of an independent coffee shop. In 1999, James Surowiecki described the (now bygone) stock woes of Starbucks. In 2005, Jack Shafer proposed that Starbucks concoct a signature beverage for Ken Auletta, to accompany the coffee cup emblazoned with his quote, because, "[w]ho could resist a bracing milk-based beverage called the Ken Aulatte."