panch ka do ya do ka paanch

In one of the Raj Kapoor movies he goes to the city and meets a banana seller. She is selling five bananas at two annas. Raj Kapoor pretending to bargain offers five annas for two bananas instead. (I don’t remember the exact numbers but the message is right). The banana seller refuses and Raj Kapoor pretends to walk away. She then figures the maths and calls him back. Our hero smiles and says, maousi, I haven’t a penny. She offers him the bananas free. And so the friendship began. Cute story. I think the movie was Shree 420 or Awara. One of those. Why am I remembering this story?
Yesterday while going home I felt a bit hungry. I stopped at the nearby tapri selling sing-chana and sukha bhel. Now I didn’t want to eat too much at the risk of filling my tummy and screwing up dinner. So I ask him, sukha bhel kitne ka? He tells me five bucks. I ask him if he could go lower and he firmly refused. NAHIN!... ok ok… I reply…paach ka de toh. Then I figured that I really did not want that much, so I tell him char rupiya ka de par panch lena. He say, “ Nahin, Sirf paanch ka milega”. I shout back, “yeda, tu pura rupiya paanch lena, par char rupiya ka hi maal dalna, mujhe kum khana hai.” I explain I don’t want to waste it. hmmmm. The bulb somewhere in his mind lit, but I don’t think completely. He was wondering if I had gone mad. He then made some, asking me if the quantity was enough. I paid him five and left. A win-win situation.
It set me thinking. Suppose if I had complicated it a bit. If I had offered him four bucks but only asked him to give me three rupees worth, what would he have done? He pay off would have been greater with a higher profit margin, I would have spent lower absolute amount of money, I would have been happy with the quantity and of course my wife would be happy that I would not waste her dinner that she prepared. What would he have done? In Mumbai the biggest cost is always real estate and must be so also for the roadside guy, after all he pays the hafta to the local goon, the BMC and the rest. It has to be a significant chunk of the cost. So given that his biggest cost is fixed he MUST try to maximize his margins.
So if I had complicated it further by offering him a choice, telling him, either give me four rupees worth at five bucks or three rupees worth at four, what would he have chosen? And if I had further given him an option to of two rupees worth at three bucks, what would he have done? As the amount grows smaller his payoffs would keep on increasing but he would be compromising his five rupee barrier. The five rupee barrier I assume is to distinguish him from the lowly sing-chana vendor and pitch him at the higher value add business of sukha bhel and higher through puts. But by increasing his margin we have him at a fix. So in effect I am keeping the one rupee premium for lower absolutes in addition to the margin that he makes on the bhel. If the premium is fixed and the margin as a percentage is intact then he must theoretically jump at the lowest offer.
I want to try this with him some day and see what he does. Doe she just ask me to fuck off or does he look at me as if I am mad or does he take the worst offer. How would his mind work, would it be rational and take the lowest offer or would it be irrational and tell me to buzz off, or would be a mumbaikar mind and assume that I am taking his case. Interesting thing this mind game might be.
Sanjeev my sister’s hubby has an interesting tale to tell. He once ordered Dahi Idli at one of the lovely south Indian joints at Kings Circle, but he loved the dahi more than the idly. So asked for more dahi. Sorry we don’t serve dahi, was the answer. Oh ok…. Ok then get me dahi idly without the idli, we will pay full price…. No.. we serve it only with the idli. Ok… then get me dahi idli with the dahi and the idli in separate dishes without mixing the two. NO… this is the only way we serve it. Oh bother…..Fact is sometimes stranger than fiction.
This should be a decent indicator of what the sing-chana vendor is likely to do, faced with the option. No wonder economics has changed since we first learnt about the rational mind and the brilliant supply and demand intersecting. This is also an example of when one can charge a premium and have the customer pay it. Finally it depends on the type of need being fulfilled. That is where the intersection changes up or down.
Bus kar yaar…. Too many economics books have gone into my head. What empty blabber. Ab mein khud pak raha hun. Will try it once on some vendor and let you know his reaction. Hehehhehehe.