1%  <  0%  ?

In the list of strange ways that our minds work, this has earned a ranking place.  Research by Mauricio M. Palmeira, and published in the Journal of Consumer Research has found that consumers more readily “get” the value of a low interest rate, than none at all.

When I tell you that instead of 16% I’m going to charge you 1% – your brain is working out that that’s a small fraction of what I could have charged you, and sparking off some happiness.  If I tell you that I’m going to charge you 0% howeer, it seems your brain will be confused – 0/20 doesn’t mean anything.  How many times worse is 20 than 0?  (cue head explosion).

Of course, it’s no news that we humans struggle with zero – it seems the concept of that as a “number” (or lack of number) probably only was used practically only as late as the 9th century AD.  So, in human terms, yesterday.

Ironically, when reading the article, I spotted this contextually-targeted ad from Virgin.  Genius.

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