The monetary price of Zero

By Shashi Narasimhiah

When we eat at a buffet, we often pile on our plate those extra items which come “free” with the meal such as the sweets dripping with sugar, chocolates, cake and at the end we don’t even spare the mint, “sompf” (fennel seeds) and the sweet beetle nut they keep on the table. And consider all those free items we have accumulated – the pens and the pads we pick up at a conference, the promotional T-shirts handed out to us, the morning cereal or the coffee mug they keep giving away at the rail station, the unwanted calendars – the list grows. We have all stood in that queue which offered a free sample of a new flavour of ice cream or iced-coffee. We tend to happily accept anything that is offered to us for “free”.  In a buy-one-get-one-free frenzy, we have ended up buying two of an item –even one of which we did not need in the first place!!

It is no secret that getting something for free feels great. What is it about“Free” or“Zero Price” that we find it so attractive and irresistible? Why does Free make us feel happy? We are well aware that Free can lead us to many problems – we accumulate things we would never ever consider purchasing. Oh it is just a freebie – or so we think.

Zero is not as simple as it seems. Did we know there are two types of Zero’s – mathematical and monetary.

Let us look at the history of mathematical Zero. Although the concept of Zero was known to be invented by Babylonians,Zero and its operation are first defined by Hindu astronomer and mathematicianBrahmagupta. He developed a symbol for zero – a dot underneath numbers. But he, too, does not claim to have invented zero.The Indian scholar Pingala paired zero with numeral 1 to get double digits and later around 500AD, Indian mathematician Aryabhata really gave Zero its rightful place in Mathematics when he exclaimed “SthanamSthanamdaShaguNam”   which translates to “Place to place 10 times in value”. With this the idea of decimal based value was born and the entire credit for binary and decimal which now finds world wide application goes to the ancient Indian scholars.

An inscription on a temple wall in Gwalior, India, dates back to the ninth century, and has been considered the oldest recorded example of a zero, according to the University of Oxford. We now know that it was as early as the third century that mathematicians in India planted the seed of the idea of Zero and decimals that would later become fundamental to the modern world. The findings show how vibrant mathematics has been in the Indian sub-continent for centuries

The concept of Zero value (or Free) in monetary terms rather than in mathematical terms is less clearly understood since it has dimensions which are not easy to measure and control as compared to the latter. The mathematical Zero is exactly only that – Zero. But Monetary Zero is less or more since it includes decision making based on thoughts, emotions and behaviour.

Thinking from a sellers view point, the concept of “Free” or “Zero Price” can be put to immense use in promoting and popularising one product over another. Much experiment, research and analysis is happening on why we go for something that is Free. In any commercial transaction there is always an upside and a down side. But when something is Free our nature is to assume that there is no downside or not notice the downside. Free or Zero is an emotional hot button – a source of irrational excitement to all of us. We have a mental block that we can’t be losing on something that is Free.Because, humans are intrinsically afraid of a loss and when something is Free, we immediately infer that there is nothing to loseand that there is no risk of having made a poor commercial decision.

Accepting a free sample has several advantages to the seller:

• First of all, when we get a free sample, we believe we have averted the risk of spending our money while trying a new product, so we whole heartedly try that.
• One may develop a liking to the product and start using it on a regular basis and end up buying the product.
• Free sample distribution results in earning more attention among the customers.
• The product and its usage gets spread by the word of mouth.
• Free samples also act as an agent of reciprocity – meaning in exchange for receiving something free the customer feels compelled to give something in return – at least a good word about it!!
• Providing free samples to existing customers will result in enhanced brand loyalty.
• A comparison of giving away free samples to traditional advertising often proves that former is more cost effective.
• It creates more positive outlook towards the product simply because it is free. Consumption of a free product such as a chocolate, ice cream, iced coffee etc may trigger a craving for more and the consumer may end up buying the same product over and over again.

As can be seen, a mathematical value can’t be attached to any of the above.

The concept of Zero or Free also applies to time. If we wait 15 minutes in a queue waiting for our turn to get a free ice cream or if we spend half hour filling out a long form for a small rebate there is something else that we are not doing with our precious and limited time.

Going further, Zero affects our food purchases too. Take for example a drink which says Zero carbs, Zero trans-fat, Zero sugar or Zero calories. We are quick to choose this over another which specifies anything higher than Zero. Suppose we are having a beer at a pub which says Zero calories, we have a few, feel great that we have not consumed any calories and end up ordering a plate of fries which might carry a zillion calories….again this is not mathematical.

We often get confused between the Mathematical Zero and Monetary Zero. Due to all of the above, we need to take note of the vital difference between the two different types of Zeros. Nothing in our life comes free. As they say there is no free lunch!! When anything is free then our freedom is the price. Don’t you think?