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So you theorize that all airlines will implement completely random fees for baggage so no one has any idea what a flight will really cost... It seems that at b

by fleitz 9y ago

So you theorize that all airlines will implement completely random fees for baggage so no one has any idea what a flight will really cost... It seems that at best there will be a small amount of information asymmetry and that should the randomness of bag prices get too bad, someone will be incentivized by the market to publish bag prices. At worst, it will lead to something like GasBuddy where consumers input what flight they took and how much the bag cost. The idea that the market for airlines will completely break down because there is no regulation on bag fees seems a little... far fetched.

rahimnathwani 9y ago
You're arguing against a bunch of things I didn't say. I didn't say even a single word about the 'market for airlines' (or about the market for air travel). My comment was a direct response to the parent comment, which claimed information symmetry isn't cited as a requirement for functioning markets. That particular statement is untrue, so I replied.
- fleitz 9y ago
  It isn't required. A lot of the value in things like the stock market is to disseminate the various information asymmetries in the form of price. There's a reason guys like Paul Krugman write books on economics rather than trade the market.
  - rahimnathwani 9y ago
    I'm glad you brought up the stock market. Insider trading laws exist in the US and most developed countries, precisely because information symmetry is important to the functioning of equities markets. EDIT: Don't take my word for it. Look at the SEC web site's description of their purpose. Excerpt (emphasis mine): "To achieve this, the SEC requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions."

by fleitz 9y ago

rahimnathwani 9y ago

You're arguing against a bunch of things I didn't say. I didn't say even a single word about the 'market for airlines' (or about the market for air travel). My comment was a direct response to the parent comment, which claimed information symmetry isn't cited as a requirement for functioning markets. That particular statement is untrue, so I replied.

fleitz 9y ago
It isn't required. A lot of the value in things like the stock market is to disseminate the various information asymmetries in the form of price. There's a reason guys like Paul Krugman write books on economics rather than trade the market.
- rahimnathwani 9y ago
  I'm glad you brought up the stock market. Insider trading laws exist in the US and most developed countries, precisely because information symmetry is important to the functioning of equities markets. EDIT: Don't take my word for it. Look at the SEC web site's description of their purpose. Excerpt (emphasis mine): "To achieve this, the SEC requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions."