4 ms·

This is a classic example of market failure. Consumers will choose the lowest rates—all else being equal—and this leads to artificially low prices. What I don

This is a classic example of market failure. Consumers will choose the lowest rates—all else being equal—and this leads to artificially low prices. What I don’t understand is whether doing this really protects their profits. If everyone does it, then it’s a race to the bottom anyway. Is it during this “transition period” where profits are made? And if everyone in the US does it, then the natural outcome is for everyone and anyone to avoid doing any business or travel in the US.

rr808 3y ago
You can't blame the provider. Eg if you were the only hotel in town without the fee and your rate is higher than everyone else you'll likely be empty. I'm sure most hotels are only too happy if everyone is banned and the playing field is flat.
fullshark 3y ago
Just seems like false advertising to me
- teeray 3y ago
  You just missed the fine print on the advertisement: * plus applicable taxes and fees, taxes on the fees, and fees for assessing the taxes and fees
Zak 3y ago
I think in many cases, companies want to keep it because it makes comparison-shopping by price more difficult. There may also be some psychological trickery wherein customers are more likely to accept a higher price after they've started the purchase process.
- nobodyandproud 3y ago
  Yeah, I agree that’s what the businesses are doing. It’s the psychological trickery where I wonder: Is there really value there in the long term?
- rescbr 3y ago
  > There may also be some psychological trickery wherein customers are more likely to accept a higher price after they've started the purchase process. At least for me, I get very incensed when merchants pull those tricks on me, to the point that I abandon carts on the last stage and start comparing prices everywhere else. Price changed at the last minute? The seller is being dishonest.
dalbasal 3y ago
Tweaking and twiddling with pricing structure... It's just what happens in a mature market. Every year, you need new ideas to make business better. This is something that you can usually futz with, and maybe get a little bit of bang. It's not necessarily about pricing template being better universally. It's just that these are factors you can move around, "optimize." Having multiple levers is just helpful. This is also an orthodox negotiation model. It's always helpful to negotiate multiple items simultaneously. Salary, benefits separately, pension separately from that, days off, personal days etc. It's very common that one is a hard no, but others are not. I know it seems to make sense to transparently aggregate everything.. but... The phenomenon exists regardless.
- nobodyandproud 3y ago
  Right. I know what you mean, but some behaviors have a chance of destroying an industry (think US auto industry or China’s melanin scandal). Yet businesses are forced to adopt because others in the vicinity do this. Some additional ground rules seems like it would beneficial.

rr808 3y ago

You can't blame the provider. Eg if you were the only hotel in town without the fee and your rate is higher than everyone else you'll likely be empty. I'm sure most hotels are only too happy if everyone is banned and the playing field is flat.

fullshark 3y ago

Just seems like false advertising to me

teeray 3y ago
You just missed the fine print on the advertisement: * plus applicable taxes and fees, taxes on the fees, and fees for assessing the taxes and fees

Zak 3y ago

I think in many cases, companies want to keep it because it makes comparison-shopping by price more difficult. There may also be some psychological trickery wherein customers are more likely to accept a higher price after they've started the purchase process.

nobodyandproud 3y ago
Yeah, I agree that’s what the businesses are doing. It’s the psychological trickery where I wonder: Is there really value there in the long term?
rescbr 3y ago
> There may also be some psychological trickery wherein customers are more likely to accept a higher price after they've started the purchase process. At least for me, I get very incensed when merchants pull those tricks on me, to the point that I abandon carts on the last stage and start comparing prices everywhere else. Price changed at the last minute? The seller is being dishonest.

dalbasal 3y ago

Tweaking and twiddling with pricing structure... It's just what happens in a mature market. Every year, you need new ideas to make business better. This is something that you can usually futz with, and maybe get a little bit of bang. It's not necessarily about pricing template being better universally. It's just that these are factors you can move around, "optimize." Having multiple levers is just helpful. This is also an orthodox negotiation model. It's always helpful to negotiate multiple items simultaneously. Salary, benefits separately, pension separately from that, days off, personal days etc. It's very common that one is a hard no, but others are not. I know it seems to make sense to transparently aggregate everything.. but... The phenomenon exists regardless.

nobodyandproud 3y ago
Right. I know what you mean, but some behaviors have a chance of destroying an industry (think US auto industry or China’s melanin scandal). Yet businesses are forced to adopt because others in the vicinity do this. Some additional ground rules seems like it would beneficial.