I was in a bar with a large group of individuals, and someone was ordering shots for everyone. The barman offered to sell us the bottle. Having done the math, we realised that it would be cheaper to buy the bottle than to buy the equilvalent volume, one shot at a time. Someone described this as “saving money”.

False. It not saving money unless you spend less. For sure, we got a lower per unit cost. If we were already going to consume the volume equivalent of one bottle, then it might have been saving money. But we had not yet decided to consume that much volume. By making us focus on the per unit cost, the barman persuaded us (remarkably easily) to dramatically increase our total volume.

The per unit cost is important, but it is not “saving money” unless the amount of cash being handed over goes down.

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