Complexity in pricing is weird, and even economists don’t always understand

Let’s say I want to sell you a widget. It’s $60.

Hmm, you say. That seems pretty steep.

Okay, I reply, how about if you buy this one widget at $60, I’ll throw in a few more — free!

Sounds better, you muse. How many free ones will you give me?

I dunno. How about a thousand.

A thousand! Wow! But then you think about it for a while. After all, what if you need more than a thousand?

I hum and haw for a little bit. The first one was $60. But the other thousand were free. I can’t keep giving away free ones. But obviously they don’t cost me all that much. How about 35 cents each? Would that be fair?

We shake on it.

Weird pricing, right? But not really, if you change “widgets” to “minutes.” Congratulations, you just bought a cell phone plan.

And no, there doesn’t appear to be much logic behind it, although the New York Times devotes three pages trying to find some.