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"Everything is worth what its purchaser will pay for it." That includes labor. The business was free to try and renegotiate their contract with their customer.

"Everything is worth what its purchaser will pay for it." That includes labor. The business was free to try and renegotiate their contract with their customer. They were free to delay the release and offer a discount. They were free to turn down the 125k and the 250k payment on principle and deal with the consequences. They found the most economical solution that met their needs was to pay $250,000 to have the work done on time. Was this poster engaging in rent seeking behavior? Absolutely. But that is a consequence of the market and one companies exploit to their own benefit all the time.

johnchristopher 6y ago
> They found the most economical solution that met their needs was to pay $250,000 to have the work done on time. I'd be inclined to believe that if there were some other providers but as it is told working with OP was the only solution. And OP's first offer was 125 000. Two screams later it's 250 000 ? It has nothing to do with economical theory or free market interpretation.
- cutemonster 6y ago
  I think 250 was likely under market value, and the seller could have raise the price more. And yelling, made the prise jump closer to market value.
  - johnchristopher 6y ago
    Maybe, maybe not. I find this explanation (from top comment) more in line with how the world spins: > If they left under bad terms because the business was a bunch of dicks, expect to pay 10x market rate. If this is truly "fix this or the business is out of business" - then it shouldn't be a tough decision to make. So, “being a dick” has more to do with price raising than any free market justification (which I am okay with, just don't try to convince me it's the only thing at play. The offer would have been 250k from the beginning then. Or 500K to get 250K, whatever.).
    - nate_meurer 6y ago
      This is such a silly and mundane bit of pedantry you're harping on here. Of course there are emotional factors in price discovery-- it happens all the time, and is a completely natural and rational part of the free market. Any small or independent contractor in any business will eventually have a blacklist, or a list of troublesome customers who get charged extra. Most of my contractors charge me less because they like me (and I pay on time). My HVAC contractor charges a particular customer double just because the customer is a rich entitled asshole; the contractor has decided that it's only worth dealing with the man's unpleasantness if there's more money to be made. Apparently the man has been blacklisted by other HVAC companies, so he might be in a tight spot, but whatever the reason, he ends up paying a lot more money for the same service. This is a completely market-based mechanism: the troublesome customer has limited options (in this case, maybe only one option), and is thus obviously disadvantaged in negotiating price. Regardless of the myriad motivations involved in price discovery, it all leads to the same place: if the price wasn't worth the service the customer was to receive, they would not have paid it. Honestly, this isn't mysterious or profound. It's economics 101.
      - johnchristopher 6y ago
        > Honestly, this isn't mysterious or profound. Yes. > It's economics 101. Not even that. It's payback, that's all it is. There's no need to call for a more elaborate explanation for what was at play here. Not that I disagree with it. It's humane nature. > My HVAC contractor charges a particular customer double just because the customer is a rich entitled asshole; Like you say. No need to even know about market dynamics to (wisely) choose that option. Because the other guy is an asshole.
- orestarod 6y ago
  First, he owed no-one anything. He could set the price to 1 billion for all he cared. His former employees could take it or leave it. Second, you speak as if his claims were irrational. The way I see it, however, you would set for 125k (probably much less judging from what you write) while he, the sentimental fool, scooped up double the money. Therefore, your decisions, which you personally claim are rational, would have left you with half the money the "irrational" player would get. Seems to me, the "irrational" is actually the rational one, as he netted more profits. Economy and market are not math games in a vacuum, and players are not formless ideas.
  - johnchristopher 6y ago
    > Second, you speak as if his claims were irrational. The way I see it, however, you would set for 125k (probably much less judging from what you write) while he, the sentimental fool, scooped up double the money. Therefore, your decisions, which you personally claim are rational, The way I see it you are putting words in my mouth and I am definitely not interested in having a discussion like that. I never insinuated OP was a sentimental fool or wrong to raise the price. I am calling bullshit on the free market and econ 101 as an explanation of why the price got doubled and call it like it is: it's payback from OP because they were dicks to him first, everything else is pedantry and useless justifications. edit: if anything, OP could be considered a fool since he obviously gave an under the market quote as his first proposal. Had he started with 250K from the beginning he would have gotten more since there likely would have been screams anyway and he would have risen the price all the same.
    - DubiousPusher 6y ago
      No one said the free market is "why" the price got doubled. Emo drama ended up being the mechanism of price discovery here. But the market accepted this price. It was not a swindle. It was free trade. And yes. I completely agree with your edit and said as much elsewhere. Their acceptance of 250K showed that the OP under-priced their services at 125K. And yes. Free markets produce monopolies. Especially when time is important. As I said above, the critical good here was not the delivery but the delivery within a certain time.

johnchristopher 6y ago

> They found the most economical solution that met their needs was to pay $250,000 to have the work done on time. I'd be inclined to believe that if there were some other providers but as it is told working with OP was the only solution. And OP's first offer was 125 000. Two screams later it's 250 000 ? It has nothing to do with economical theory or free market interpretation.

cutemonster 6y ago
I think 250 was likely under market value, and the seller could have raise the price more. And yelling, made the prise jump closer to market value.
- johnchristopher 6y ago
  Maybe, maybe not. I find this explanation (from top comment) more in line with how the world spins: > If they left under bad terms because the business was a bunch of dicks, expect to pay 10x market rate. If this is truly "fix this or the business is out of business" - then it shouldn't be a tough decision to make. So, “being a dick” has more to do with price raising than any free market justification (which I am okay with, just don't try to convince me it's the only thing at play. The offer would have been 250k from the beginning then. Or 500K to get 250K, whatever.).
  - nate_meurer 6y ago
    This is such a silly and mundane bit of pedantry you're harping on here. Of course there are emotional factors in price discovery-- it happens all the time, and is a completely natural and rational part of the free market. Any small or independent contractor in any business will eventually have a blacklist, or a list of troublesome customers who get charged extra. Most of my contractors charge me less because they like me (and I pay on time). My HVAC contractor charges a particular customer double just because the customer is a rich entitled asshole; the contractor has decided that it's only worth dealing with the man's unpleasantness if there's more money to be made. Apparently the man has been blacklisted by other HVAC companies, so he might be in a tight spot, but whatever the reason, he ends up paying a lot more money for the same service. This is a completely market-based mechanism: the troublesome customer has limited options (in this case, maybe only one option), and is thus obviously disadvantaged in negotiating price. Regardless of the myriad motivations involved in price discovery, it all leads to the same place: if the price wasn't worth the service the customer was to receive, they would not have paid it. Honestly, this isn't mysterious or profound. It's economics 101.
    - johnchristopher 6y ago
      > Honestly, this isn't mysterious or profound. Yes. > It's economics 101. Not even that. It's payback, that's all it is. There's no need to call for a more elaborate explanation for what was at play here. Not that I disagree with it. It's humane nature. > My HVAC contractor charges a particular customer double just because the customer is a rich entitled asshole; Like you say. No need to even know about market dynamics to (wisely) choose that option. Because the other guy is an asshole.
orestarod 6y ago
First, he owed no-one anything. He could set the price to 1 billion for all he cared. His former employees could take it or leave it. Second, you speak as if his claims were irrational. The way I see it, however, you would set for 125k (probably much less judging from what you write) while he, the sentimental fool, scooped up double the money. Therefore, your decisions, which you personally claim are rational, would have left you with half the money the "irrational" player would get. Seems to me, the "irrational" is actually the rational one, as he netted more profits. Economy and market are not math games in a vacuum, and players are not formless ideas.
- johnchristopher 6y ago
  > Second, you speak as if his claims were irrational. The way I see it, however, you would set for 125k (probably much less judging from what you write) while he, the sentimental fool, scooped up double the money. Therefore, your decisions, which you personally claim are rational, The way I see it you are putting words in my mouth and I am definitely not interested in having a discussion like that. I never insinuated OP was a sentimental fool or wrong to raise the price. I am calling bullshit on the free market and econ 101 as an explanation of why the price got doubled and call it like it is: it's payback from OP because they were dicks to him first, everything else is pedantry and useless justifications. edit: if anything, OP could be considered a fool since he obviously gave an under the market quote as his first proposal. Had he started with 250K from the beginning he would have gotten more since there likely would have been screams anyway and he would have risen the price all the same.
  - DubiousPusher 6y ago
    No one said the free market is "why" the price got doubled. Emo drama ended up being the mechanism of price discovery here. But the market accepted this price. It was not a swindle. It was free trade. And yes. I completely agree with your edit and said as much elsewhere. Their acceptance of 250K showed that the OP under-priced their services at 125K. And yes. Free markets produce monopolies. Especially when time is important. As I said above, the critical good here was not the delivery but the delivery within a certain time.