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You're mostly arguing against Adam Smith here, and that war was mostly won long ago. It feels counter intuitive that companies acting in their best interest wo

by jasmer 4y ago

You're mostly arguing against Adam Smith here, and that war was mostly won long ago. It feels counter intuitive that companies acting in their best interest would be not in the communities best interests, but interestingly, it's definitely not zero sum game. Particularly in this instance, wherein we have rich countries offering services at a discounted rate, it's actually hugely beneficial to almost everyone. If you force a 'single price point' - the profit maximizing point will almost assuredly be much higher than most of the world can afford and so the net surpluses are lower. Price discrimination in this case is reasonable. Where it gets messy are for things like concert tickets. As far as 'PPP gaming' - this is not a new concept, and SaaS is not even remotely relevant to anything at national level economics. The 'PPP' game has been going on since the dawn of time! Literally the first Mesopotamian writing systems revolved around bookeeping and pricing. PPP is not going to be the driving force for pricing for any company that's sophisticate enough to do this - they will find the right price in France the same way they do in America. The PPP is a secondary measurement. The problem in Argentina is that their leaders are corrupt and a bit dumb. Not an 'index'. That said, there is still a lot of room for discussion about this.

shkkmo 4y ago
> Particularly in this instance, wherein we have rich countries offering services at a discounted rate, it's actually hugely beneficial to almost everyone. This seems highly debatable in several fronts and likely is dependent on the specific circumstances of each market. In some cases it may function like providing cheap food and clothing, where it can be beneficial in the short term, but often causes mid to long term economic damage to the receiving economy by putting local producers/providers out of business. Whether beneficial or not, the motivation behind this geographic price fixing is absolutely not fairness, but profit maximization. While companies are free to charge prices they wish in different countries, I think it is against our self interests to have laws that help enforce this price discrimination. Consumers are already at a power disadvantage here, giving companies more power to charge the highest price they can only worsens that disadvantage. > PPP is not going to be the driving force for pricing for any company that's sophisticate enough to do this - they will find the right price in France the same way they do in America. The PPP is a secondary measurement. It was literally cited as the basis for the solution being discussed in TFA. I didn't say that PPP gaming was anything new (which is why I cited old examples) but pointed out that this already existing issue will become larger if the approach described in the article spreads. > The problem in Argentina is that their leaders are corrupt and a bit dumb. Not an 'index'. While Argentina is especially bad. Leaders are corrupt and dumb all over the world. However, the behavior I am referencing in Argentina was absolutely directly related to the Big Mac Index since they directly manipulated the price of Big Macs specifically. Their other manipulations of PPP are harder to attribute, but that one is pretty clear.
- jasmer 4y ago
  ", but often causes mid to long term economic damage to the receiving economy by putting local producers/providers out of business." That is something completely different, and has little to do with price discrimination. If the service is materially cheaper as provided by the 'rich country' - well, you say 'companies are out of business' - I say - consumers are getting massive surpluses. They can share those surpluses how they want aka social programs via taxation. Of course, if the rich country is 'dumping' on the poor one to put players out of business, it's a different story. "existing issue will become larger if the approach described in the article spreads." My friend, price discrimination is already universal. There is no need to worry about 'spreading'. Everyone is doing it. They always have. It's only news to small companies who need to grow internationally and to the people that work there. Argentina's manipulation of 'Big Macs' is an example of corruption (and stupidity).

by jasmer 4y ago

shkkmo 4y ago

> Particularly in this instance, wherein we have rich countries offering services at a discounted rate, it's actually hugely beneficial to almost everyone. This seems highly debatable in several fronts and likely is dependent on the specific circumstances of each market. In some cases it may function like providing cheap food and clothing, where it can be beneficial in the short term, but often causes mid to long term economic damage to the receiving economy by putting local producers/providers out of business. Whether beneficial or not, the motivation behind this geographic price fixing is absolutely not fairness, but profit maximization. While companies are free to charge prices they wish in different countries, I think it is against our self interests to have laws that help enforce this price discrimination. Consumers are already at a power disadvantage here, giving companies more power to charge the highest price they can only worsens that disadvantage. > PPP is not going to be the driving force for pricing for any company that's sophisticate enough to do this - they will find the right price in France the same way they do in America. The PPP is a secondary measurement. It was literally cited as the basis for the solution being discussed in TFA. I didn't say that PPP gaming was anything new (which is why I cited old examples) but pointed out that this already existing issue will become larger if the approach described in the article spreads. > The problem in Argentina is that their leaders are corrupt and a bit dumb. Not an 'index'. While Argentina is especially bad. Leaders are corrupt and dumb all over the world. However, the behavior I am referencing in Argentina was absolutely directly related to the Big Mac Index since they directly manipulated the price of Big Macs specifically. Their other manipulations of PPP are harder to attribute, but that one is pretty clear.

jasmer 4y ago
", but often causes mid to long term economic damage to the receiving economy by putting local producers/providers out of business." That is something completely different, and has little to do with price discrimination. If the service is materially cheaper as provided by the 'rich country' - well, you say 'companies are out of business' - I say - consumers are getting massive surpluses. They can share those surpluses how they want aka social programs via taxation. Of course, if the rich country is 'dumping' on the poor one to put players out of business, it's a different story. "existing issue will become larger if the approach described in the article spreads." My friend, price discrimination is already universal. There is no need to worry about 'spreading'. Everyone is doing it. They always have. It's only news to small companies who need to grow internationally and to the people that work there. Argentina's manipulation of 'Big Macs' is an example of corruption (and stupidity).