Dive into the captivating world of “An Economic Mystery at the All-You-Can-Eat Buffet,” a must-have teaching resource for English educators and a gem for self-studying students. This material intriguingly combines the dynamics of buffet dining with economic concepts, offering a unique perspective on everyday experiences. Tailored for adult English learners, it’s filled with rich vocabulary, real-world scenarios, and thought-provoking discussions, making learning both engaging and practical. Ideal for sparking lively classroom interactions or self-paced study.
An Economic Mystery at the all-you-can-eat buffet
Warm up: Imagine you’re at your favorite restaurant and they introduce an all-you-can-eat option. How would you decide whether to choose this option or order as usual? What factors would influence your decision?
Listening: Link to audio [HERE]
Transcript:
JUANA SUMMERS, HOST:
Our colleagues at Planet Money like to look for economics in the darnedest places. Recently, they went to Las Vegas to explore an economic mystery at – get this – the all-you-can-eat buffet. Erika Beras and Jeff Guo have the story.
ERIKA BERAS, BYLINE: That mystery is called the flat-rate pricing bias.
JEFF GUO, BYLINE: And to explore it, we met up with Eric Chiang. He’s an economics professor at the University of Nevada, Las Vegas and a buffet connoisseur. Eric took us to one of his go-to spots.
ERIC CHIANG: OK, let’s go back in the main entrance here.
BERAS: According to legend, the all-you-can-eat buffet was born in Las Vegas. And this all-you-can-eat pricing model – the economics term for it is flat-rate pricing, where you pay one price to use a service as much as you want.
CHIANG: For example, your wireless plan – you may have all you can text and talk on your plan.
GUO: Yeah, unlimited.
CHIANG: Unlimited talk and text. Absolutely.
BERAS: You see flat-rate pricing in a lot of places – public transit, gyms, streaming services and, of course, buffets.
GUO: So we’re only paying $17.95?
BERAS: Lucky us.
GUO: But the mystery with flat-rate prices is that in a lot of cases, it’s actually a bad deal. For instance, studies have shown that many people would save money if they switched their cellphones from unlimited data plans to buying data a la carte.
BERAS: So why do people gravitate toward flat-rate pricing? What explains the flat-rate pricing bias? Economists have come up with three reasons.
GUO: First is the idea that people are just irrational. They overestimate how much food they’re going to eat at the buffet or how many cellphone minutes they’re going to use each month.
BERAS: But Eric says there’s another explanation – a more rational one.
CHIANG: Consumers don’t like to feel like every unit of a product they consume, they’re going to be charged for. This is often called, like, the taxi-meter effect, where if you sit in a taxi, watching that meter keep ticking up – it has some really awful feeling.
GUO: So the idea is that people are willing to pay a premium to avoid that awful feeling, to avoid the pain of the taxi-meter effect.
BERAS: And related to that is the third explanation for why people opt for flat-rate pricing. It has to do with something that economists call the insurance effect. Think of it this way – if you’re not sure how much data you’re going to use in a month, an unlimited data plan saves you from the risk of an enormous surprise, unexpected bill. And at a buffet, the flat-rate pricing gives you the freedom to try as many new things as you want.
GUO: Because the cost of taking a risk at a buffet is…
CHIANG: Zero. If I don’t like it, you just don’t eat it.
GUO: Economists say that people are attracted to flat-rate pricing for a mix of all three of these reasons – the taxi-meter effect, the insurance effect and because they sometimes overestimate how much they’re actually going to consume.
Chicken cassoulet.
BERAS: Ooh.
GUO: Julia Child, eat your heart out.
BERAS: If you want that, it may not be there by the time you come back for plate three.
CHIANG: I think it’s worth trying.
Words and phrases:
- Darndest: (Adjective) Used to emphasize the surprising or difficult nature of something. 가장 놀라운
- Connoisseur: (Noun) An expert judge in matters of taste.감정가
- Go-to spot: (Noun phrase) A popular or favored place for a specific activity or purpose. 단골 장소
- A la carte: (Adjective, Adverb) Referring to food that can be ordered as separate items, rather than part of a set meal. 일품 요리로
- Gravitate: (Verb) To move toward or be attracted to a place, person, or thing. 끌리다
- Irrational: (Adjective) Not logical or reasonable. 비합리적인
- Opt for: (Verb phrase) To choose or select from a range of possibilities. 선택하다
- Eat your heart out: (Idiomatic phrase) Used to express the idea that someone will feel great envy or regret. 부러워 죽겠다
Comprehension Questions:
- What is the economic mystery explored in this story, and where did the reporters go to investigate it?
- How is the concept of “flat-rate pricing” defined, and where is it commonly found in various services?
- According to the story, why might flat-rate pricing sometimes be disadvantageous for consumers?
- What are the three main explanations provided by economists for people’s preference for flat-rate pricing?
- How does the concept of the “insurance effect” relate to the attraction of flat-rate pricing?
Discussion Questions:
- Have you ever experienced flat-rate pricing in services like buffets or cell phone plans? How did you feel about this pricing model?
- Which of the three reasons presented for the preference for flat-rate pricing do you think plays the most significant role in people’s decisions? Why?
- Do you believe that flat-rate pricing is a more rational choice in some situations, even if it may cost more in the long run?
- Discuss the idea of the “taxi-meter effect.” Have you ever felt uncomfortable watching the cost of a service increase in real time? How did it make you feel?
- Do you think businesses use flat-rate pricing to attract more customers, even if it may not be the most cost-effective option for consumers? What are the potential pros and cons for businesses employing this pricing model?
LanguageLeap 