Is It Ethical To Exploit Your Customer's Poor Maths?

I just read this short article in the Economist about the psychology of discounting http://www.economist.com/node/21557801.


It discusses a study recently conducted by the University of Minnesota which discovered that customers generally fail to recognise that a 50% increase in quantity is the equivalent of a 33% discount in price and tend to assume that the former is better value (sounds like more, doesn't it!).



Other studies have shown that consumers are more likely to see a bargain in a product that is reduced by 20% and then reduced by a further 25% rather than the same product reduced by an equivalent one-off 40%.


So the question for today - Is this kind of discounting misleading or simply good retail marketing?