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>It's a lemon market. You mean it's a market with information asymmetry? How so? Customers know both that the sales taxes exist and their magnitude. If you thi
by pandaman 3y ago
>It's a lemon market.
You mean it's a market with information asymmetry? How so? Customers know both that the sales taxes exist and their magnitude. If you think it's a great idea you can put big sign saying on your shop/in your ad "inc. tax" instead of "plus tax", which is on most advertisements already. Surely customers could read it.
- kelipso 3y agoWhy are sticker prices $24.99 instead of $25.00? Tricks the brain into thinking the price is lower. Same thing with additional tax at counter instead of sicker price.
- lmm 3y ago> Customers know both that the sales taxes exist and their magnitude. Customers have a sense that they exist and a vague idea of their magnitude, perhaps. They don't calculate them, at best they compare the advertised number - remember most customers are average intelligence or below.
- pandaman 3y agoEveryone has a phone that can manage calculations nowadays, few people can or want to calculate precise taxes. I still don't see how it makes advertising prices with taxes a "lemon market", which somehow prevents businesses from advertising such prices, if I understood your assertion correctly. Some businesses do advertise prices with tax, most don't. If people really wanted prices to include tax they'd naturally took their custom to the businesses that advertise "inc. tax" and took it away from "plus tax" ones, resulting in the situation opposite to what we have now.