Question

Suppose you have been hired as a management consultant by a major oil company to help it optimally price gasoline at its service stations. Your client wants to know what will happen to gasoline demand if it increases gasoline prices by one cent higher than its nearest competitors. One of the members of your consulting​ team, Debbie, shares that one time in college she stopped buying gasoline from a service station that was one cent more expensive.

Based on this​ story, should you conclude that demand will fall to zero if the client raises gas prices by one​ cent?

Answer 1

No​, Debbie's story is an argument by anecdote​, and it can lead to

wrong conclusions.

Step-by-step explanation:

An argument by anecdote is when a point is proven with a story. It can be a very compelling argument, and this is because people usually like the stories about other people more than they like facts.

In general, the anecdotal argument will relate to the subject matter that is being discussed. However, anecdotal evidence is unreliable because it can be unscientific or pseudoscientific due to the fact that various forms of cognitive bias may affect the collection or presentation of evidence.

As we can see in the scenario given above, Debbie's argument is unreliable because it is her personal experience and not the collective experience of all the consumers when the price increased by one cent. Also, no form of survey or research was carried out, therefore Debbie's argument is not scientific.