Updated: Oct 31st, 2008 My brother has now provided further clarification of the principle and has given this m0vement the moniker NOPE for Not One PEnny. Please see his comment below for more discussion and additional tie breaker rules.
I have to credit my brother Ron for the topic of this post. The catalyst for this entry was that I actually acted upon his theory twice while traveling around Northern Illinois and Southern Wisconsin this weekend. So about now, you are wondering what this theory is all about. Ron and I have had numerous discussions regarding the price of gas. During one of these discussions, he detailed out a plan to influence market pricing for gas. It is actually fairly simple in understanding and execution, but the dilemma is that it has to be regionally followed or it will have little impact on the overall pricing. If collectively executed, I think it may change the way the market looks at demand based pricing. Ron never gave a clever title to his concept, so I am going to go ahead and label it for him…. he is definitely welcome to change it if he wants. So here goes.. ready… The 3P Principle or expanded… the Perfect Petro Pricing Principle. Unlike most economic principles these days, this one doesn’t take a thesis to explain. In fact, it only takes a sentence. If there are multiple gas stations in reasonable proximity, ALWAYS go to the station with the lowest displayed price even if it requires an inconvenience to get to the location or wait an additional amount of time waiting for a free pump. Now that was not that difficult was it? The heart of the theory is market based pricing. There is absolutely no way an establishment can continue pricing different than a competitor who has the same customers. Eventually, depending on his loss longevity, the price will have to come down to at least match the other businesses…. and ideally, from a capitalist point of view, he might re-price down below the competitors to win back some of the lost customers. That sets up another round of discounts from the rest of the competitors. There are some quirks to the principle due to some options like the level of octane that is provided, what detergent is included etc. But apparently the gas stations don’t really think this is important to you or they would actually put it on their sign next to their displayed gas prices so you could decide how much YOU really care about it. If you are not driving a high end vehicle, I doubt you care if it is 87 or 89 and in the Midwest just assume it has 10% Ethanol in it. So instead of just complaining about the high prices or bandwagoning on the dependency of foreign oil so we must go green crap, do something about it and start following the 3P Principle (or whatever he decides to call it)
Doing my part this weekend, I had the chance to make this choice twice. The first time was South of Rockford IL in a small town called Rochelle…. and as I say everytime I pass that city: “Rochelle Rochelle, a young girl’s erotic journey from Milan to Minsk” If you are a Seinfeld fan, you should be laughing now. Anyway, we had to fill up for gas and as usual on the interstate, there were three filling stations to choose from. Two of them were at $2.99/gallon and the other one was at $2.84. Even though we had to drive 500 feet extra and wait for a light, I made my wife go to the cheaper gas. Of course, there were some customers at the other stations paying too much, but it will probably take a little while to get the word out on this genius plan. We filled up and went on our merry way having lost only about 4 minutes extra due to seeking out the cheaper price.
The second time was up in Lake Geneva, but it slightly backfired on us but on reflection, the proximity parameter really wasn’t met. We drove into Lake Geneva off of Rt 12 on the East side of the lake. The gas price at that particular spot was $2.95. We were still okay on the guage, so we completely traversed to the West side via the southern Lake Shore drive. On that end, there was a gas station displaying $2.85. Can someone please tell me why the gas is priced differently a mere 20-30 miles away? We noticed the cheaper gas, but the guage was still in our favor so we started heading back to the East, but this time via the North side. Unfortunately, I made my wife take a wrong turn which literally brought us back down to the exact same point we saw the $2.85 station. Yes, I heard about that for at least 20 minutes straight. At that point I decided it was an omen so I made her stop for gas. Unfortunately, when we retraced our Northern route, we passed another gas station that had $2.84 displayed…. still better than $2.95 though. So, we did our part this weekend. A few more thousand regionally concerned citizens and we should start seeing a true impact.
All credit goes to my brother Ron! now about that nomogracult thing…
Life Intrigued 
Hey, thanks for the plug. I’ve come to call it the “Not One PEnny” (NOPE) movement. This moniker is a reminder that even a one cent difference in price is critically important here, and it also it calls to mind the quote “Millions for defense, not one penny for tribute” from the 1798 XYZ Affair with France (well, it does to me). It is unrelated to my attempt to boycott the movies of one particular Hollywood star, “Not One Penn” (NOPENN).
Anyway, as you say, if everyone (or nearly everyone) would follow this simple rule, then the consumer would have ultimate power over the gasoline companies:
RULE: At any given intersection with multiple gas stations, patronize the one with the least price per gallon.
Simple, seems like a no-brainer, but people do patronize gas stations with higher prices even when there is another gas station on the other corner. And this is the thing: if no one at all bought gas at the more expensive gas station, the gas station will be forced to lower its price to sell anything, and do it within a day or two.
Now there’s one corollary, since a deadlock situation may exist where all gas stations at an intersection sit at the same price per gallon. There needs to be a forcing function, an impulse, to break this tie:
COROLLARY: If the lowest price is shared by more than one gas station, patronize the one whose name is alphabetically nearest Z.
Why in reverse alphabetical order? Because Citgo is near the beginning of the alphabet. Sorry, BP.
The other gas station(s) will have to drop their price, and the gas war will resume. Game Theory in practice. I may have missed the peak of consumer anger over gas prices, as they are dropping, but it’s still the principle I follow. If gas prices go back up I may launch this movement with a website and well-placed Internet publicity, because as consumers this is our only recourse to the huge gas company profits at our expense. If countries would do this, OPEC would be broken (Hmm, may have to reverse the alphabetic sorting for this, as Venezuela is at the upper end–yay America!).
Anyway, if this goes public I would suggest that anyone participating in this movement place a penny on top of the gas pump of the chosen station. If there’s one there already, there’s no reason to add another one. Then people will start to wonder why they are seeing pennies on top of gas pumps while they’re standing there waiting for the gas tank to fill up–so there’s a kind of viral advertising. If someone takes a penny, well shame on them but it’s not too much, and it might even mimic the “Leave a penny, take a penny” cup in gas stations for those who are short a penny, so it can be kind of a good Samaritan thing as well. And therefore tax deductible.
I keep thinking of these things (strange that I’m your brother…). Some McDonalds around here now launch a professional recording when you get to the drive-thru station that welcomes you, suggests a meal (don’t do it!), and then says “May I help you?”. They’ve got to be kidding–to me, this is the same as walking up to the counter inside and having the register person push a button and stand there looking at you while this greeting plays. I don’t know why companies assume you are going to follow their business plans. In this case, I don’t respond, I just sit there until the real person finally comes on and asks me if they can help me. If everyone did this those impersonal recordings would be history. It’s not rocket science, it’s consumers taking a responsible role in the free market.
As another example, it bugs me when I enter my entire cell phone number into a recorded menu and when I finally get a real person the first thing they ask is for my cell phone number. I tell them I already entered it manually digit-by-digit. It doesn’t help, but it might if more people complain about it. And when I hear that this call may be monitored for quality purposes, I tell the real person who answers that this call may be monitored for quality purposes. Throws ’em a bit.
Hey, looking for guest essays?? 8^)
Ron
Wow – instant clarification. Okay so NOPE it is… and I have also boycotted every single thing Penn has ever done since Fast Times – I always get very annoyed when a high school dropout magically thinks he is god’s gift to national policy…. besides do you really trust the advice of someone who would marry Madonna? I would like to suggest we go with the A-Z order and add a caveat to the rule. In no case do you ever opt for CITGO. After that rule, go in alphabetical order skipping over said CITGO. That way you can still apply the rule if you are drunk since thinking backward is kind of difficult Wait for it… Wait for it… snare drum bada boom THAT WAS JUST A JOKE. I definitely like the penny addition – subtle yet effective.
On the Micky D front, weren’t they the ones trying to man their drive-thrus via outsource? I think so, which would fall right in line with the recording crap. I get extremely annoyed when the teller tries to recommend an entree anyway. Not once have I ever deviated from my intended order based on their suggestion and if you haven’t made up your mind by the time you are in line at the drive thru… get the hell out of line and go inside and stop making me waste time while you read the menu that hasn’t changed in probably 10 years. Hey, it just occurred to me.. I can start actually using the bogus green movement in my favor. While sitting there waiting for you to decide I can start screaming “Sustainability” and “You are causing my over reliance on foreign oil” making me idle the engine while you choose the make my butt bigger combo #1. By the way, I act like I don’t hear the teller recommendation and make him/her say it another 3 or so times until the guy behind me yells “Sustainability” (actually I generally only do it when nobody else is in line)
And finally the phone support annoyance. You are touching all my hotpoints tonight. I will have to try your genius line and report back on the response in my blog. I was going to blog on this anyway, but I called AT&T Mobile last week to see about some Internet access options. The lady answers the call and informs me her name isMahogany. Great, this is going to be a worthless call because I am already talking to WOOD.
Thanks for the comments and clarifications and we are ALWAYS looking for guest essays – especially with such dead on topics. It does look like my angst level has tilted a little high. Not sure if it is the elections or a high occurrence of ridiculous situations. I’ll try to find something sweet and sappy to level me out a little.
LikeLike
Yeah, I agree, we have to go with the straight alphabetical tie-breaker with an option (encouragement) to skip Citgo. Sorry, Zephyr.
I actually didn’t catch your drunk driving joke. Clever! Yes, some McDonalds have been outsourcing their drive-in interaction to India, but not around here. I think I would ask for the sandwich advertised in the window or something. The key in these things is to cause delay–most McDonalds I have seen start a very visible digital counter of the number of seconds to process a drive-thru order, and from the management signs regarding the daily average I assume this is a key quality metric.
As far as the phone response, I wrote “monitored for quality control” when I meant to say their standard phrase “monitored or recorded for quality control.” The great thing about this is that you’ve just told them you are going to record the conversation, which at times is something I want to do anyway and now I’ve informed them so it’s legal. And don’t think that AT&T wouldn’t trot out their “quality control” recordings in a court case.
OK, my last complaint today about fast-food restaurants. It drives me up a wall when I start giving my order, and the person taking the order just looks at me, so I slow down and then I realize he is going to make me go through my whole order before he enters anything, and then when I’m done he looks down at the register and asks me to repeat everything I said one at a time because he can’t remember anything I’ve said. Not that I could, but that’s why I’d enter it as it is given.
Ron
For someone who started out working at a fast food restaurant, you sure have some angst against them. As far as metrics, a Burger King in East Peoria has a small digital sign hanging in the back near their food prep counters. It is somewhat situated where it is a little difficult to see from the counter, but we always make a point to find out what it is displaying. We believe it represents some assessment of the throughput .. translated their customer service. The first time we went in, it was at a D-. We went again last month and it actually started out at a B-, but a quick check before we left it had migrated back down to a C-. I did notice that the cashier would go off and do fries or act like she was checking on the food when there were a large number of orders piling up so I am guessing the clock starts as soon as the order is entered. We even have a picture of the sign and planning on posting it… along with a picture on the door saying it was illegal to take photos inside the restaurant.. I wonder what they are trying to hide.
I do like the augmented monitoring message – nothing like striking back at one of the most annoying practices out there.
I have a slightly different problem at the East Peoria Schlotsky’s (who knows if I spelled that right). They changed ownership probably closer to 8 months ago and look to have changed ownership again. The tastier Quiznos moved in just down the block and quite frankly we rarely go there anymore. But when I do end up going, I always order the same thing – turkey breast on a wrap. Every single time I go there I have to explain to the cashier what button to press on the register. They always want to call for the manager until I simply tell them to hit the LOW CARB button in the middle of the bottom row. I can generally tolerate this, but like you I can’t stand dealing with a person in a role he/she isn’t qualified for…. and as far as not writing down the order (yes truly annoying) but not summing up the ticket is just as bad especially since I am basing the tip on that amount and there are times when I miscalc (usually LOWER, hmmmm, I wonder why that is)
thanks for the feedback
LikeLike