1950’s Peruvian Coke and Gacha

In the 1950’s, Peruvian inflation forced Coke to charge more per bottle of Coke. Unfortunately, their vending machines required updating to accept a new domination, a domination that was far too large of a price increase. Instead, Coke devised a probabilistic system: the machine would charge the same amount as before, but randomly refuse to give a bottle. This raises the expected price of a bottle Coke while forgoing any mechanical updating. But a miscellaneous software engineer has a better idea: raise the price of Coke, but instead randomly give the money back.

Our Surfer is ‘risk loving’

The increase in price for a ‘bottle draw’ would equal the expected payoff of of a lower ‘draw price’ of one that randomly refuses to give a bottle. This is an interesting experiment, as gacha is the number one player frustration in free-to-play games.

Anyone care to reckon which one would perform better?

Author: pblack

Games are fun, economics is fun, let's get um married.

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