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> an argument is that tariffs should lead to higher prices for US consumers At the same time, though, prices can never rise higher than the consumer is willing

by 9rx 1y ago

> an argument is that tariffs should lead to higher prices for US consumers At the same time, though, prices can never rise higher than the consumer is willing to pay. All else equal that ultimately needs to be true, but there are many variables that do not need to remain equal, so it is not a foregone conclusion. The 2022 food crisis offered pretty good motivation for consumers to pay more — people were truly worried about going hungry there for a while, albeit thankfully that concern didn't last long. I'm not sure tariffs offer the same kind of motivation. I expect there is a strong "Haha. No. I'm not paying more for this arbitrary reason that can be (and probably will be) reversed on a whim." sentiment out there right now.

skeezyboy 1y ago
> At the same time, though, prices can never rise higher than the consumer is willing to pay. ahhh, the naivety of youth. not only can they, they have.
- 9rx 1y ago
  No. Can't happen. Saying "I will sell you this widget for no less than one billion dollars!" doesn't establish a price. Price is not determined until a voluntary transition takes place. And a voluntary transaction fundamentally cannot take place without a buyer willing to pay the transacted price. As we saw in 2022, fear of starvation is a pretty strong motivator to see consumers wanting to pay more to secure their spot in line. A random dude who likes to draw nude art for his friend saying everyone should pay more because of, uh, reasons... Not so much. That's not to say that sentiment cannot change, but without strong motivation there is no reason for it to happen any time soon.
  - skeezyboy 1y ago
    > Price is not determined until a voluntary transition takes place youre talking about market value. price is definitely set before the transaction takes place. you can set the price at whatever you like.
    - 9rx 1y ago
      > youre talking about market value. No. I am talking about price. Price measures what you are giving up to receive value. > price is definitely set before the transaction takes place. No. You're likely thinking of an offer. Offers are made before the transaction takes place. Offers are spoken of in terms of the price the seller (or buyer) hopes to see, but it is not yet set. Negotiation can still occur at this stage, as can rejection. Vendors with a lot of traffic are able to gain a pretty good handle on what consumers are willing to pay, so often, for all intents and purposes, the first offer and price end up being equivalent. Perhaps that is what you are thinking of? Regardless, CPI looks at what consumers are actually buying. No matter how you want to define price in some sort of vacuum, price with respect to CPI can only increase if the buyers are willing.
      - skeezyboy 1y ago
        > No. I am talking about price. Price measures what you are giving up to receive value. but you said "Price is not determined until a voluntary transition takes place" so does it happen before or after the "transition" takes place? id say price is set before, market value is what actually someone paid for it and comes after
        9rx 1y ago
        > so does it happen before or after the "transition" takes place? As the quote you offered says, it is measured after. I suppose theoretically in some kind of bending of space and time it could be measured during the exact instant it is created, but as we return back to reality... It certainly cannot be measured before. One cannot measure that which does not exist. > market value is what actually someone paid for it and comes after Value is, let's say, intrinsic. Whereas price is the measurement of it. To use an analogy, it is like the difference between distance and length. > id say price is set before While you are certainly welcome to make up any old random definition on the spot, given that we're talking about price within the context of CPI we know it is not "set before". CPI measurement is taken in hindsight, after consumers have already made their purchases. The values it gathers are post-sale.
deleted 1y ago
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by 9rx 1y ago

skeezyboy 1y ago

> At the same time, though, prices can never rise higher than the consumer is willing to pay. ahhh, the naivety of youth. not only can they, they have.

9rx 1y ago
No. Can't happen. Saying "I will sell you this widget for no less than one billion dollars!" doesn't establish a price. Price is not determined until a voluntary transition takes place. And a voluntary transaction fundamentally cannot take place without a buyer willing to pay the transacted price. As we saw in 2022, fear of starvation is a pretty strong motivator to see consumers wanting to pay more to secure their spot in line. A random dude who likes to draw nude art for his friend saying everyone should pay more because of, uh, reasons... Not so much. That's not to say that sentiment cannot change, but without strong motivation there is no reason for it to happen any time soon.
- skeezyboy 1y ago
  > Price is not determined until a voluntary transition takes place youre talking about market value. price is definitely set before the transaction takes place. you can set the price at whatever you like.
  - 9rx 1y ago
    > youre talking about market value. No. I am talking about price. Price measures what you are giving up to receive value. > price is definitely set before the transaction takes place. No. You're likely thinking of an offer. Offers are made before the transaction takes place. Offers are spoken of in terms of the price the seller (or buyer) hopes to see, but it is not yet set. Negotiation can still occur at this stage, as can rejection. Vendors with a lot of traffic are able to gain a pretty good handle on what consumers are willing to pay, so often, for all intents and purposes, the first offer and price end up being equivalent. Perhaps that is what you are thinking of? Regardless, CPI looks at what consumers are actually buying. No matter how you want to define price in some sort of vacuum, price with respect to CPI can only increase if the buyers are willing.
    - skeezyboy 1y ago
      > No. I am talking about price. Price measures what you are giving up to receive value. but you said "Price is not determined until a voluntary transition takes place" so does it happen before or after the "transition" takes place? id say price is set before, market value is what actually someone paid for it and comes after
      - 9rx 1y ago
        > so does it happen before or after the "transition" takes place? As the quote you offered says, it is measured after. I suppose theoretically in some kind of bending of space and time it could be measured during the exact instant it is created, but as we return back to reality... It certainly cannot be measured before. One cannot measure that which does not exist. > market value is what actually someone paid for it and comes after Value is, let's say, intrinsic. Whereas price is the measurement of it. To use an analogy, it is like the difference between distance and length. > id say price is set before While you are certainly welcome to make up any old random definition on the spot, given that we're talking about price within the context of CPI we know it is not "set before". CPI measurement is taken in hindsight, after consumers have already made their purchases. The values it gathers are post-sale.

deleted 1y ago

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