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Corporations Learned the Maximum Amount They Can Charge for a Product
- derelicta 2y agoCan't wait for them to adapt my mcnuggets price based on my credit score.
- bequanna 2y agoI’m curious, what are the arguments against making price discrimination illegal? It seems like something the public will push for if companies overplay their hands and start doing this too aggressively.
- lupire 2y agoThe principle of freedom. The principle that poor people are the majority and prefer to pay less for things. The principle that it's better for consumers and producers to engage in trade than to force a business to be unviable.
- master-lincoln 2y agoFreedom to screw people over with intransparency Price discrimination doesn't guarantee cheaper products for poor people. E.g. the same shampoo when labeled for women here costs more. Or say Netflix costs less in some regions that are considered poor, but the rich people there still pay the lesser price. If a business is only viable by extracting the most from every individual instead of finding a fair price, is it really better for society that business exists? What a about the principle of fairness and people being treated equally?
- lotsofpulp 2y ago> What an about the principle of fairness and people being treated equally? Life is not fair from the moment of conception choosing which parents and location you are born to. > If a business is only viable by extracting the most from every individual instead of finding a fair price, is it really better for society that business exists? A buyer buying for the lowest price they can and the seller selling for the highest price they can is the definition of a fair price. Since supply and demand curves are constantly in flux, the fair price is also constantly in flux. Hence the practice of haggling with every vendor in old school markets/bazaars, even for daily vegetables.
- Turing_Machine 2y ago> E.g. the same shampoo when labeled for women here costs more. Hmmm... is it really the "same" shampoo? In my experience, products aimed at women typically have fancier packaging, added scent, and often exotic ingredients (which may or may not have any actual effect). All of those things cost more money. It's like the argument about laundering and pressing women's blouses costing more than men's dress shirts. Men's shirts are more or less standardized, and can be processed using semi-automated equipment, while women's blouses often have lace, ruffles, or other decoration, large fancy buttons, unusual cuts, etc. and have to be pressed by hand.
- Spooky23 2y agoThe principle that it’s better for company management to exploit finance market inefficiencies to yield profit today at the expense of the investors and bond holders caught holding the bag tomorrow.
- scotty79 2y ago> I’m curious, what are the arguments against making price discrimination illegal? Markets work better the more customer knows about a product and the company that provides it. Markets work worse when the company knows more about the customer and the product than the customer that buys it. It's basically extension of market for lemons.
- memen 2y agoWhat do you mean by 'better' and 'worse'? In other words, what is your definition of a good market?
- scotty79 2y agoThe market is better when sum of the economic gain of all actors is greater.
- Spooky23 2y agoWith something like airlines that isn’t always obvious. Is a sustainable airline industry the greatest value? Or is it better to have a boom-bust market where passengers have greater access to travel? It’s not an easy question.
- oytis 2y agoThese look like arguments for making price discrimination illegal? I think alternative to making it illegal could be demanding full disclosure to eliminate information disparity. If a company does it, it should make it clear that it does it, and disclose the price range and criteria to determine your price (the latter can be obfuscated by AI-washing though). It looks like in the EU the requirement to disclose the fact of using personalised pricing alone (without further detail) discourages most of retailers from using it.
- scotty79 2y agoIf you can discriminate on price and gain you know about your customer too much.
- tyingq 2y agoIt's been pretty common in the travel industry for quite a long time. There's pushback every now and then, but generally the "free market" isn't doing much in that regard.
- amadeuspagel 2y agoPrice discrimination ensures that poorer people get stuff cheaper. Price discrimination is why poor people can afford flying today.
- oytis 2y agoSurely it's price discrimination and not the boom of low-cost carriers?
- amadeuspagel 2y agoPrice discrimination is how low-cost carriers make money.
- bryanlarsen 2y agoThe price floor is set by the marginal cost even with price discrimination. That's the same price floor as in a single price system. The poor gain little, if any, from price discrimination.
- amadeuspagel 2y agoPrice discrimimation is only possible with market power, in cases where the single price would not be the marginal cost.
- bryanlarsen 2y agoFirst class is still a thing even on highly competed flights that are well covered by multiple carriers.
- HDThoreaun 2y agoWithout price discrimination airlines would raise prices and not fill their planes. Price discrimination allows them to extract as much as they can which maximizes the number of people who can fly
- HPsquared 2y agoAnd a face scan to evaluate how good-looking you are.
- dachworker 2y agoFacebook/Instagram/Tinder already do that.
- verticalscaler 2y agoOn Tinder you get invited to pay $500/mo for some "super secret exclusive" version. I got prompted by the app with a free month - it is wall to wall high end escorts. At some point you gotta accept that this is dystopia.
- toomuchtodo 2y agoThat’s highway robbery to access high end escorts.
- HPsquared 2y agoThe platform, or the users?
- pjc50 2y agoWhat, really, is the difference between country-specific pricing and ethnicity-specific pricing? (yeah, this line of thinking isn't going to go anywhere good)
- londons_explore 2y agoOne is legal, the other is not, but they most achieve (mostly) the same outcome.
- csomar 2y agoCountry specific is related to a country purchasing power. I wasn’t aware that there are ethnic specific pricing though.
- tyingq 2y agoFeels like there's also a practice for a couple of years where companies raise prices in line with inflation, but keep annual employee COLA raises pinned to their typical 2-3% historical rate.
- lupire 2y agoWhat private companies have COLA raises? Corporate raises have been 0%.
- tyingq 2y agoIt's pretty common from my experience, for Fortune 500 type companies to do an annual raise of 2-3% for employees that is not tied to a promotion. They may not call it a "COLA" raise, but that's what it is. Though, yes, I'm sure some have frozen that in recent years. Edit: Okay here's an example: https://www.imercer.com/articleinsights/2024-first-quarter-us-comp-planning https://www.imercer.com/articleinsights/2024-first-quarter-u... Note that they talk about it being a "merit raise", but that's sort of double talk. It's the budget for raises that aren't tied to a promotion. So the pool amount is 3.5%-ish, and you get some leeway to personalize it a bit..some people get 0%, some 2%, some 5%, etc. But it's just a COLA in disguise where most people get just under the pool percentage. Meaning most people get 2.5-3% or so. Mercer gets their data from roughly 500 companies of varying sizes. And, yes, I'm sure there are some places that don't give any sort of annual COLA type raises at all.
- ttmb 2y agoWhen a company says "cost of living" they mean their own, not their employees. So-called COLA adjustments are for Cost of Hiring, or Cost of Employee Retention. The distinction is that it is calculated based on minimizing unwanted attrition due to wage competition elsewhere, and has nothing to do with how much rent or milk prices may have increased.
- consp 2y ago> It's pretty common from my experience, for Fortune 500 type companies to do an annual raise of 2-3% for employees that is not tied to a promotion That's not what I've heard but then again n=1. No inflation correction because [insert snarky comment about c-suite compensation].
- ipnon 2y agoIsn’t this a priori a good thing to know? Is the universe where we can’t accurately determine these numbers a better place to live?
- dachworker 2y agoNo, I don't think so. It probably hurts the overall economy to squeeze every last bit of juice out of the consumer base like this, leaving them with no money to spend in other ways.
- rjmunro 2y agoThe maximum the business can charge is not just constrained by what the customer can afford, but also by the costs of alternatives that the customer could use (including the option of not doing it at all). It's often the case that overall prices fall. For example, by keeping prices similar to what airline tickets used to cost for business customers, airlines can reduce the price to others and increase the number of flights, increase efficiency, and provide a better level of service.
- oytis 2y agoNot sure about the universe, but sounds like a terrible thing for a consumer.
- elp 2y agoIsn't this also just basic economics in action? Companies have always tried to maximize their revenue. It might be faster now but the process is no different than your local supermarket messing with the price of toilet paper every few weeks.
- Spooky23 2y agoIt is. The innovation in that cheap capital has rolled up industries. It’s easy to keep meat prices high when 3 companies control 80% of volume. In past times, you have dozens or hundreds of suppliers who controlled little regional niche markets.
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- HPsquared 2y agoOh no, a range of options.
- deleted 2y ago[deleted]
- DataDive 2y agoWhat nobody knows is what happens when everyone goes full ham with manipulations. All these techniques, from gamification to behavioral mining, were developed in isolation - when only one actor maximized their profits. Their results apply when most other actors don't pursue the same goals. Once everyone starts to do it, I predict none will work and will be counterproductive on a larger scale. A bit of a tragedy of commons.
- bluefirebrand 2y agoSeems like a bit of a prisoner's dilemma from the perspective of the companies If they don't do it but their competitors do, they will lose But if all of them do it they will all lose in the end
- londons_explore 2y agoAnd a nash equilibrium will be found, exactly as free markets should behave.
- rusk 2y agoAnd what about the underserved consumers keeping this whole equilibrium afloat?
- bluefirebrand 2y ago"a nash equilibrium" also known as "the bottom, reached after a race there" It's not really what I would call a good outcome
- randomtoast 2y agoYou can see this dilemma on YouTube. Videos with highly exaggerated facial expressions, arrows, and sensationalized titles full of exclamation marks tend to attract far more clicks (and therefore more revenue) than those with honest titles and straightforward thumbnails. This trend has forced even high-quality content creators to adopt these tactics to remain financially viable. Despite the misleading titles and thumbnails, their actual content often maintains the same high standards once the video begins.
- tiahura 2y ago[flagged]
- robocat 2y agohttps://podcasts.apple.com/us/podcast/odd-lots/id1056200096 https://podcasts.apple.com/us/podcast/odd-lots/id1056200096
- mitchbob 2y agohttps://archive.ph/2024.06.03-080543/https://www.bloomberg.com/news/articles/2024-06-03/corporations-learned-the-maximum-amount-they-can-charge-for-a-product https://archive.ph/2024.06.03-080543/https://www.bloomberg.c...