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Given that inflation constantly occurs, it is a sad fact that the small denominations of money become progressively of lower value.
At some point it makes sense for the smallest values to be removed from the currency system. Unfortunately, this makes economists nervous about further inflation and
the imminent fall of civilisation.
Fortunately, we can avoid this. All we need is stochastic rounding.
Suppose that we plan on discarding all proportions of five pence.
There are many products available which cost 99 pence. Rounding up to a big pound would generate inflation, while rounding down to 95 pence would cut in to the retailers profit margin. What is to become of these unfortunate circumstances?
Have no fear, simply use stochastic rounding. A simple randomness generater is required[1].
For the example given, if you were to purchase a product priced 99p, you would pay 95 pence one-fifth of the time and 100p four-fifths of the time.
The outcome is no net change in price, and economists can sleep at night.
[1]A simple device similar to a pachinko machine would be sufficient, possibly using the change in question itself. To avoid cheating by the store owner, the customer could nominate which slot would be in their favour.
[link]
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You will note I have given you 1/5 of a croissant. |
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Customer: How much is this?
Shopkeeper: £1
Customer: That's too much. I'll put it
back.
...
Customer: How much is this?
Shopkeeper: £1
Customer: That's too much. I'll put it
back.
...
Customer: How much is this?
Shopkeeper: £1
Customer: That's too much. I'll put it
back.
...
Customer: How much is this?
Shopkeeper: £1
Customer: That's too much. I'll put it
back.
...
Customer: How much is this?
Shopkeeper: 95p
Customer: I'll take it. |
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//Customer: How much is this?
Shopkeeper: £1
Customer: That's too much. I'll put it back.
...
Customer: How much is this?
Shopkeeper: 95p
Customer: I'll take it.// |
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Hence the pachinko machine.
Your stochastic change would pass through the machine so you'd either get it, or not. |
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But then you can return it. And buy it again. Until you win. May not be worth it for to most for a nickel (or whatever you call a 5 pence), but there will be that one guy... |
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I've noticed that certain shops claim to be for ever slashing their prices,therefore i don't buy anything.I'll just wait until everything is free. |
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//But then you can return it. And buy it again.// |
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There is no law that says shopkeepers have to serve people, or even give refunds on non-faulty goods. |
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But when you return the item, you get 99p back, not what you actually paid, so there's a 1 in 5 chance that when you return the item that you paid 100p for that you will only get 95p back. If the first time you bought the item you got it for 95p, you could return it and have a good probability of making 5p on the deal, but assuming you actually want to buy the item, chances are, the next time you try to buy it you will get it for 100p. |
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With even odds, such low stakes, and such a boring mechanism, it would hopefully be unattractive for people to waste their time trying to use this for gambling. |
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4/5 of a croissant for the interesting idea, but I certainly hope nobody ever implements it. |
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//But when you return the item, you get 99p back, not what you actually paid...// |
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Do you know of any shop which accepts returns without receipt? |
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While I hadn't originally considered this problem, I too don't think it would be a big problem in practice. It could be completely avoided by only refunding the lower price (except where goods were faulty and a receipt was provided) for instance. (This could be permitted by law.) |
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//..and such a boring mechanism..// |
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Actually I worried a little about people finding the machine too much fun. Then I decided it wouldn't be a problem - the shop might sell a little more, that is all.
Maybe of more concern is that children might learn that gambling is fun, playing again and again for penny sweets. |
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Of course on bulk orders the stochastic change would only be provided on the remainer (ie up to 4 times in the example given), so you wouldn't have to play pachinko all day. |
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//(or whatever you call a 5 pence)//
A shilling (at least until 1971). |
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I think this would be a good idea but also damn annoying. + |
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Somewhat preheated in some science fiction and fantasy cultures, where gambling is inherent in the society. Often the merchant and the customer roll for double or nothing, or to establish a price by the roll of the dice. |
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