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There's a positive externality that arises from price-sensitive shopping. It promotes competition, which leads to lower prices for everyone. If everyone behav

There's a positive externality that arises from price-sensitive shopping. It promotes competition, which leads to lower prices for everyone. If everyone behaved like you, requiring a 40% discount before moving away from Amazon, then Amazon would just set its prices 1/.6 = 66% higher than the other stores. Fortunately, not everyone is like you, so Amazon's prices are often competitive. To some degree, I suppose this is like buying index funds versus buying individual stocks. I only buy index funds. But the reason I can get away with it is that there are at least a few people out there searching for value. I can't compete with them. But I can price-compare online, or at gas stations, etc. I see shopping for low prices as part of my duty as a capitalist. :)

pdonis 11y ago
> There's a positive externality that arises from price-sensitive shopping. The term "price sensitive" is a bit misleading. A better term would be "value sensitive". Your duty as a free market participant (I prefer that term because "free market" is not necessarily the same as "capitalism") is to get the best value you can for your money. But that is value to you, and will be different for different people. Also, that value has to include the cost of the time and effort you spend searching for value, which is also different for different people.
vinceguidry 11y ago
There's a positive one from convenience-sensitive shopping too. > then Amazon would just set its prices 1/.6 = 66% higher than the other stores. And such would be the price of convenience. I shop at Publix and pay the higher prices over Kroger because Publix is 5 minutes away from my house whereas Kroger is 10. I don't do major grocery shopping as I'm single. I'm happy Publix exists and if everybody were so price sensitive they'd drive to Kroger instead, Publix would go out of business or lower the quality of their services so they can compete price-wise with Kroger. Having multiple store options available diversifies not just the market for goods, but also the market for shopping experiences. Price-sensitive shopping, if everyone did it, would absolutely lower prices for everyone, but ultimately would reduce options. I would hate to live in that world. I bet that Kroger has a better, more convenient experience than it would if Publix wasn't there, simply because Publix is an option. Kroger does have self-checkout lanes and nice decor, just not as nice as Publix's.

pdonis 11y ago

> There's a positive externality that arises from price-sensitive shopping. The term "price sensitive" is a bit misleading. A better term would be "value sensitive". Your duty as a free market participant (I prefer that term because "free market" is not necessarily the same as "capitalism") is to get the best value you can for your money. But that is value to you, and will be different for different people. Also, that value has to include the cost of the time and effort you spend searching for value, which is also different for different people.

vinceguidry 11y ago

There's a positive one from convenience-sensitive shopping too. > then Amazon would just set its prices 1/.6 = 66% higher than the other stores. And such would be the price of convenience. I shop at Publix and pay the higher prices over Kroger because Publix is 5 minutes away from my house whereas Kroger is 10. I don't do major grocery shopping as I'm single. I'm happy Publix exists and if everybody were so price sensitive they'd drive to Kroger instead, Publix would go out of business or lower the quality of their services so they can compete price-wise with Kroger. Having multiple store options available diversifies not just the market for goods, but also the market for shopping experiences. Price-sensitive shopping, if everyone did it, would absolutely lower prices for everyone, but ultimately would reduce options. I would hate to live in that world. I bet that Kroger has a better, more convenient experience than it would if Publix wasn't there, simply because Publix is an option. Kroger does have self-checkout lanes and nice decor, just not as nice as Publix's.