William Poundstone, author of Priceless: The Myth of Fair Value, shows how Starbucks subtly manipulates our thinking and nudges us to the middle.
The Starbucks menu uses the “rule of three.” The menu offers three sizes of coffees, given the enigmatic names of Tall, Grande, and Venti. (They're 12, 16, and 20 ounces respectively; 24 ounces for cold Venti drinks, to allow for ice.) Since Starbucks newbies won't know what they're getting, they tend to order the middle choice, Grande. In the psychology literature, this is known as “extremeness aversion” — people instinctively favor a middle choice, figuring it's safer. Guess what? You've just ordered two cups of expensive coffee. The Grande's sixteen ounces is two regular cups. Here's a secret: Manys Starbucks will serve you eight ounces of coffee, but you have to ask for a “Short” coffee (which isn't listed on the menu). You do have to remember that password “Short,” though: Company policy says that a customer who asks for a “small” coffee is to be given a “Tall” one.