3 ms·

Your max price should be the price such that you're indifferent between buying the item at that price and not buying it at all. At a shop, usually you're payin

Your max price should be the price such that you're indifferent between buying the item at that price and not buying it at all. At a shop, usually you're paying less than the maximum you'd be willing to pay, because the shop's prices are fixed and it would be a big coincidence if the price they set happened to match your max price exactly.[1] So even if we model you as homo economicus, it's normal that you're almost always fine with paying $X + $0.01. In the case where $X really is your max price (i.e. it's right at your threshold of indifference), the idea of rejecting $X + $0.01 seems less silly. You were already very close to deciding $X was too much, so you're probably feeling ambivalent about making the purchase, and the trivial nudge of an extra cent being added to the price might as well be what pushes you over the edge. [1] There are exceptions, e.g. when you have a negligible preference between brands A and B, so you're defaulting to brand A because the prices are exactly the same, but you would buy B if it were marginally cheaper. But that doesn't affect the main point here.

mort96 9mo ago
I don't see why I would buy something if I'm indifferent to whether I buy the thing.
- retsibsi 9mo ago
  So it should be the highest price such that you're not indifferent, you marginally prefer to buy it. The point is that you're right at the threshold where it's just barely worth it to you.
  - mort96 9mo ago
    The gap between total indifference and wanting something bad enough to bid on it is always going to be more than $.01.
    - retsibsi 9mo ago
      I reckon that's empirically false. Shops set prices like $499.99 for a reason. (And it has to be theoretically false, otherwise $X is equivalent to $X + $0.01 for all X, and so if you'd buy something at 1c you'd buy it for the contents of your bank account.) If you still dispute this, you need to try to explain how a larger price difference can affect your decision. If you'd happily place a $1 bid, and you'd definitely not place a $100 bid, and a 1c difference could never deter you from placing a bid, then... well, how is that possible?
      - mort96 9mo ago
        Regarding the last part: it's simple, $1.01 is less than $100 This process doesn't work endlessly. You can't just add $.01 a billion times and I'd still pay it. But it works once or twice. Shops set prices like $499.99 due to funny psychological effects: $499.99 is still a price "in the 400s" while $500 is "in the 500s". Nobody sits down and thinks logically about it and concludes that no, the $.01 difference between $499.99 and $500.00 crosses the line. But people see $499.99 and the brain initially goes "oh, it's only 400-something".
        retsibsi 9mo ago
        Are you: - agreeing there must be some threshold such that if the price is $X then you will buy(/bid on) the item, but if the price is $X + $0.01 then you won't; - but maintaining that in a case where you have already decided to buy/bid and the price then rises by $0.01, you will always go ahead and pay the extra cent (provided this hasn't already happened a bunch of times)? If so, then I don't see the original problem. Do your best to estimate X (or, more specifically, the value of X you actually endorse as your 'true' valuation), and put that in as your maximum bid. If you get the item at $X you'll be marginally pleased; if you get it for less then you'll be more pleased; and if you miss out on it then you shouldn't mind, as you knew it was only going to be just barely worth it at $X. If you're actually disagreeing with the first point, then you still need to explain how that can make sense. It's coherent to say that in practice, after making the decision to buy at a given price, you would always accept a 1c price rise but at some point between the first 1c rise and the billionth you'd tell the guy to piss off. But that's not the same as saying the actual value of the item, separate from the emotions involved in the purchase process, is somehow indeterminate. If it's not worth it at $1, and it's worth it at $100, but 1c can never take it from "worth it" to "not worth it", then ?

mort96 9mo ago

I don't see why I would buy something if I'm indifferent to whether I buy the thing.

retsibsi 9mo ago
So it should be the highest price such that you're not indifferent, you marginally prefer to buy it. The point is that you're right at the threshold where it's just barely worth it to you.
- mort96 9mo ago
  The gap between total indifference and wanting something bad enough to bid on it is always going to be more than $.01.
  - retsibsi 9mo ago
    I reckon that's empirically false. Shops set prices like $499.99 for a reason. (And it has to be theoretically false, otherwise $X is equivalent to $X + $0.01 for all X, and so if you'd buy something at 1c you'd buy it for the contents of your bank account.) If you still dispute this, you need to try to explain how a larger price difference can affect your decision. If you'd happily place a $1 bid, and you'd definitely not place a $100 bid, and a 1c difference could never deter you from placing a bid, then... well, how is that possible?
    - mort96 9mo ago
      Regarding the last part: it's simple, $1.01 is less than $100 This process doesn't work endlessly. You can't just add $.01 a billion times and I'd still pay it. But it works once or twice. Shops set prices like $499.99 due to funny psychological effects: $499.99 is still a price "in the 400s" while $500 is "in the 500s". Nobody sits down and thinks logically about it and concludes that no, the $.01 difference between $499.99 and $500.00 crosses the line. But people see $499.99 and the brain initially goes "oh, it's only 400-something".
      - retsibsi 9mo ago
        Are you: - agreeing there must be some threshold such that if the price is $X then you will buy(/bid on) the item, but if the price is $X + $0.01 then you won't; - but maintaining that in a case where you have already decided to buy/bid and the price then rises by $0.01, you will always go ahead and pay the extra cent (provided this hasn't already happened a bunch of times)? If so, then I don't see the original problem. Do your best to estimate X (or, more specifically, the value of X you actually endorse as your 'true' valuation), and put that in as your maximum bid. If you get the item at $X you'll be marginally pleased; if you get it for less then you'll be more pleased; and if you miss out on it then you shouldn't mind, as you knew it was only going to be just barely worth it at $X. If you're actually disagreeing with the first point, then you still need to explain how that can make sense. It's coherent to say that in practice, after making the decision to buy at a given price, you would always accept a 1c price rise but at some point between the first 1c rise and the billionth you'd tell the guy to piss off. But that's not the same as saying the actual value of the item, separate from the emotions involved in the purchase process, is somehow indeterminate. If it's not worth it at $1, and it's worth it at $100, but 1c can never take it from "worth it" to "not worth it", then ?