4 ms·

It's essentially predatory behaviour, exploiting those in need. I think anyone arguing in favour of 'pure' market outcomes is essentially arguing in favour of u

by tmnvix 2y ago

It's essentially predatory behaviour, exploiting those in need. I think anyone arguing in favour of 'pure' market outcomes is essentially arguing in favour of unethical behaviour.

cma 2y ago
It isn't always exploiting dire needs. It can be a redistributive mechanism like progressive taxes, especially when combined with taxes on the profits.
unsupp0rted 2y ago
Either all selling is predatory or none of it is. I’m in the former camp- it’s predatory and our prosperity is built on it.
- darth_avocado 2y ago
  Supply demand dynamics only work for optional spending and in market segments that have real competition.
- brookst 2y ago
  "Either all or none" is a very questionable heuristic for anything. It is possible that price gouging after a natural disaster is predatory, while action pricing for one-of-a-kind memorabilia is not.
jahewson 2y ago
Is the pure market outcome not that someone creates a competing insulin company? Patents and the buying practices of Medicare (both government interventions in the market) would seem to be the two biggest blockers.
- polski-g 2y ago
  Yes. The pure market solution to "overcharging" people seeking housing is that people with available housing (near Palisades) go stay in Nebraska for six months, and sublet their existing available residence for $10k/mo. But politicians in California have forbidden the market from functioning in such a way -- so those with housing (possibly) available chose not to offer it because the price isn't worth it.
  - jahewson 2y ago
    Exactly - and it sounds harsh at first but consider that a family of four put up in a hotel for a month is going to cost a figure close to that and the insurance company is paying for it. Plus the timescales involved go beyond “emergency” to actually effecting the market. LA is down 5000+ properties for the next 3+ years - a genuine reduction in supply that will drive prices upwards. Price caps don’t limit demand and instead cause supply shortages, which we should expect to see in LA.
SoftTalker 2y ago
Another way to look at it is charging what the market demand dictates. If you charge your normal rate, rooms will sell out and only the lucky ones who booked early will get a room. If you set a rate that leaves 5 or 10% of rooms vacant, someone who needs a room can get one (though it will be expensive). I've seen this advocated many times here for how cities should set parking rates. It never seems to be called predatory in that scenario.
- ericmay 2y ago
  Time pressure and space requirements are a concern with parking, and also the government built the infrastructure (roads, sidewalks, etc.). It’s not really a good comparison and doesn’t seem predatory at all. But also if you consider it predatory then you wouldn’t want to advocate or defend the expansion of the practice into other areas.
  - SoftTalker 2y ago
    I don't; I consider it the market working. During COVID, I'd have preferred to be able to buy a roll of toilet paper for $5 than to have the price unchanged but the stores totally sold out for weeks.
    - ericmay 2y ago
      I think as a society we have largely decided that in cases of acute shortage we don't want to raise prices and cause further problems. If toilet paper is $5/roll maybe instead of paying surge pricing for it, people just start stealing it off of trucks. What actually occurred was people hoarding toilet paper for no reason, since there wasn't actually a shortage. It was a manufactured "shortage". Maybe had we enforced some sort of reasonable buying scheme we wouldn't have had any problems at all. You can see this in the bourbon market to some extent, actually. In Ohio rare bottles are sold at retail pricing and you join a lottery to be able to purchase one. Secondary prices are $1,000 for a $100 bottle. We could just let people who are willing to wait to be first in line buy bottles and then sell them at higher prices - that's market efficiency, but we've decided that kind of sucks and instead we've decided to enact a lottery instead and open the bottles so you can't resell them as easily. Most people are pretty happy with the results. It's not efficient but that's ok. I think parking falls under a similar purview, except that the government is heavily involved in parking schemes. As an example, the promotion of the usage of gas-powered vehicles and the automobile industry, which require us to go to war and things to secure supplies. There's very little that is efficient about that market and the usage of the vehicles is extremely subsidies, you're only noticing the immediate cost when you go and have to pay pricing for peak/off-peak hours. Other goods and services are more efficient and/or less necessary, so there's different pricing schemes that we like as a society. The main problem with economics as a field is that it assumes "good" and/or rational behavior. But markets and the economy are just one aspect of society. We intentionally make trade-offs all the time because we like the results, even if they aren't efficient.
chrismcb 2y ago
I don't believe it is unethical at all. If you have one of something, who do you sell it to? The highest bidder? The first bidder? The person you like the most? Why is one more or less ethical than another?
- janalsncm 2y ago
  I think you are underestimating the depth of information such an automated system would have. This is Uber surge pricing but for everything. What I am concerned about are the emergent effects of this. Invariably, everything will be more expensive. Whether a single transaction is unethical is kind of missing the point.

by tmnvix 2y ago

It's essentially predatory behaviour, exploiting those in need. I think anyone arguing in favour of 'pure' market outcomes is essentially arguing in favour of unethical behaviour.

cma 2y ago

It isn't always exploiting dire needs. It can be a redistributive mechanism like progressive taxes, especially when combined with taxes on the profits.

unsupp0rted 2y ago

Either all selling is predatory or none of it is. I’m in the former camp- it’s predatory and our prosperity is built on it.

darth_avocado 2y ago
Supply demand dynamics only work for optional spending and in market segments that have real competition.
brookst 2y ago
"Either all or none" is a very questionable heuristic for anything. It is possible that price gouging after a natural disaster is predatory, while action pricing for one-of-a-kind memorabilia is not.

jahewson 2y ago

Is the pure market outcome not that someone creates a competing insulin company? Patents and the buying practices of Medicare (both government interventions in the market) would seem to be the two biggest blockers.

polski-g 2y ago
Yes. The pure market solution to "overcharging" people seeking housing is that people with available housing (near Palisades) go stay in Nebraska for six months, and sublet their existing available residence for $10k/mo. But politicians in California have forbidden the market from functioning in such a way -- so those with housing (possibly) available chose not to offer it because the price isn't worth it.
- jahewson 2y ago
  Exactly - and it sounds harsh at first but consider that a family of four put up in a hotel for a month is going to cost a figure close to that and the insurance company is paying for it. Plus the timescales involved go beyond “emergency” to actually effecting the market. LA is down 5000+ properties for the next 3+ years - a genuine reduction in supply that will drive prices upwards. Price caps don’t limit demand and instead cause supply shortages, which we should expect to see in LA.

SoftTalker 2y ago

Another way to look at it is charging what the market demand dictates. If you charge your normal rate, rooms will sell out and only the lucky ones who booked early will get a room. If you set a rate that leaves 5 or 10% of rooms vacant, someone who needs a room can get one (though it will be expensive). I've seen this advocated many times here for how cities should set parking rates. It never seems to be called predatory in that scenario.

ericmay 2y ago
Time pressure and space requirements are a concern with parking, and also the government built the infrastructure (roads, sidewalks, etc.). It’s not really a good comparison and doesn’t seem predatory at all. But also if you consider it predatory then you wouldn’t want to advocate or defend the expansion of the practice into other areas.
- SoftTalker 2y ago
  I don't; I consider it the market working. During COVID, I'd have preferred to be able to buy a roll of toilet paper for $5 than to have the price unchanged but the stores totally sold out for weeks.
  - ericmay 2y ago
    I think as a society we have largely decided that in cases of acute shortage we don't want to raise prices and cause further problems. If toilet paper is $5/roll maybe instead of paying surge pricing for it, people just start stealing it off of trucks. What actually occurred was people hoarding toilet paper for no reason, since there wasn't actually a shortage. It was a manufactured "shortage". Maybe had we enforced some sort of reasonable buying scheme we wouldn't have had any problems at all. You can see this in the bourbon market to some extent, actually. In Ohio rare bottles are sold at retail pricing and you join a lottery to be able to purchase one. Secondary prices are $1,000 for a $100 bottle. We could just let people who are willing to wait to be first in line buy bottles and then sell them at higher prices - that's market efficiency, but we've decided that kind of sucks and instead we've decided to enact a lottery instead and open the bottles so you can't resell them as easily. Most people are pretty happy with the results. It's not efficient but that's ok. I think parking falls under a similar purview, except that the government is heavily involved in parking schemes. As an example, the promotion of the usage of gas-powered vehicles and the automobile industry, which require us to go to war and things to secure supplies. There's very little that is efficient about that market and the usage of the vehicles is extremely subsidies, you're only noticing the immediate cost when you go and have to pay pricing for peak/off-peak hours. Other goods and services are more efficient and/or less necessary, so there's different pricing schemes that we like as a society. The main problem with economics as a field is that it assumes "good" and/or rational behavior. But markets and the economy are just one aspect of society. We intentionally make trade-offs all the time because we like the results, even if they aren't efficient.

chrismcb 2y ago

I don't believe it is unethical at all. If you have one of something, who do you sell it to? The highest bidder? The first bidder? The person you like the most? Why is one more or less ethical than another?

janalsncm 2y ago
I think you are underestimating the depth of information such an automated system would have. This is Uber surge pricing but for everything. What I am concerned about are the emergent effects of this. Invariably, everything will be more expensive. Whether a single transaction is unethical is kind of missing the point.