3 ms·

If by this you mean that standard supply-demand economics can't model price discrimination, which is what's going on here, that's not correct. See, for example,

by pdonis 6mo ago

If by this you mean that standard supply-demand economics can't model price discrimination, which is what's going on here, that's not correct. See, for example, Chapter 10 of David Friedman's Price Theory, where he models price discrimination using supply and demand curves just fine. In terms of this kind of analysis, price discrimination is a way for sellers to try to transfer as much as possible of what would otherwise be consumer surplus, to themselves.

WalterBright 6mo ago
And the buyer tries to pay as little as possible. Negotiating is a skill well worth learning (lots of books on it).
- 9dev 6mo ago
  This discussion is perverse. Negotiations require leverage, which the average grocery buyer in the USA does not have. As a society we don't benefit from min-maxing absolutely every opportunity.
  - WalterBright 6mo ago
    [flagged]
    - RandomLensman 6mo ago
      Government stores are fine then?
      - WalterBright 6mo ago
        The PX is subsidized by the taxpayers, and it's a benefit provided to members of the military and their families. A military base is a socialist paradise, which only works because taxpayers pay for it. My dad grew up a socialist. He was cured of that affliction after living on military bases for years. For example, the economy on a base on the surface looks like a money based economy. But it isn't. The actual economy is based on rank and a currency of mutual favors. For example, the guy who allocates base housing to you obliges you to return a favor if you get better quarters. Having a higher rank means you can grant more favors, and so get more favors in return. The USSR economy ran like that, too, on a massive scale. P.S. The USSR's actual prices on things included the time spent waiting in line. People would pay others to wait in line for them. Talk about inefficiency!
        RandomLensman 6mo ago
        Not sure what the means of production are that are under societal ownership with respect to the military. Anyway, how non-human relationship driven do you think the private economy is?
        WalterBright 6mo ago
        Personal favors do play a role in the private economy, but money is still the dominant currency. Under socialism, the dominant currency is favors. Favors are a form of barter, and barter economies are inefficient. I can explain why if you like.
- pdonis 6mo ago
  The buyer in a grocery store can't negotiate; the store just sets the price and the buyer's only choice is to take it or leave it. Under the conditions described, the product is still worth it to the buyer who the store is charging the higher price (the one the store knows has more income and so can afford to pay more), at the higher price--there's just less consumer surplus. So the buyer still buys the product. But there's no negotiation anywhere; there's no opportunity for it.
  - WalterBright 6mo ago
    The store manager has a lot of flexibility, and some of the staff are also empowered to take care of things. If you feel you are being overcharged, see the manager. If you're nice to them, you can negotiate. Remind him how many years you've been a loyal customer. Being polite and friendly works, being a jerk does not. The ultimate negotiating tactic is to explain your position politely to the store manager, and walk out. I remember buying a car from a dealer. The dealer wouldn't agree to my price. He was adamant about it. So I got up, left, got in my car, started the engine, and backed out. The dealer came running out of the showroom and said he'd match my price. Businessmen will always tell you that prices aren't negotiable. That is a tactic for rubes.
    - deleted 6mo ago
      [deleted]
    - pdonis 6mo ago
      All of this is very nice--and irrelevant to the point under discussion. Under the scenario that the Maryland law is outlawing, the richer customer who is being charged the higher price by the grocery store still finds the product to be worth it to them at the higher price. And since their time has value, and they're just grocery shopping, and they're rich and not trying to pinch pennies, they'll just buy the thing at the price the store is asking. There will be less consumer surplus for them, as I said, than there would be if the store were charging them the same price as the average middle class person--but it's highly doubtful that it will be worth their time to try to extract that extra consumer surplus from the store. That's why stores want to price discriminate in the first place--because they know the richer customers won't bother trying to haggle over price.

by pdonis 6mo ago

WalterBright 6mo ago

And the buyer tries to pay as little as possible. Negotiating is a skill well worth learning (lots of books on it).

9dev 6mo ago
This discussion is perverse. Negotiations require leverage, which the average grocery buyer in the USA does not have. As a society we don't benefit from min-maxing absolutely every opportunity.
- WalterBright 6mo ago
  [flagged]
  - RandomLensman 6mo ago
    Government stores are fine then?
    - WalterBright 6mo ago
      The PX is subsidized by the taxpayers, and it's a benefit provided to members of the military and their families. A military base is a socialist paradise, which only works because taxpayers pay for it. My dad grew up a socialist. He was cured of that affliction after living on military bases for years. For example, the economy on a base on the surface looks like a money based economy. But it isn't. The actual economy is based on rank and a currency of mutual favors. For example, the guy who allocates base housing to you obliges you to return a favor if you get better quarters. Having a higher rank means you can grant more favors, and so get more favors in return. The USSR economy ran like that, too, on a massive scale. P.S. The USSR's actual prices on things included the time spent waiting in line. People would pay others to wait in line for them. Talk about inefficiency!
      - RandomLensman 6mo ago
        Not sure what the means of production are that are under societal ownership with respect to the military. Anyway, how non-human relationship driven do you think the private economy is?
        WalterBright 6mo ago
        Personal favors do play a role in the private economy, but money is still the dominant currency. Under socialism, the dominant currency is favors. Favors are a form of barter, and barter economies are inefficient. I can explain why if you like.
pdonis 6mo ago
The buyer in a grocery store can't negotiate; the store just sets the price and the buyer's only choice is to take it or leave it. Under the conditions described, the product is still worth it to the buyer who the store is charging the higher price (the one the store knows has more income and so can afford to pay more), at the higher price--there's just less consumer surplus. So the buyer still buys the product. But there's no negotiation anywhere; there's no opportunity for it.
- WalterBright 6mo ago
  The store manager has a lot of flexibility, and some of the staff are also empowered to take care of things. If you feel you are being overcharged, see the manager. If you're nice to them, you can negotiate. Remind him how many years you've been a loyal customer. Being polite and friendly works, being a jerk does not. The ultimate negotiating tactic is to explain your position politely to the store manager, and walk out. I remember buying a car from a dealer. The dealer wouldn't agree to my price. He was adamant about it. So I got up, left, got in my car, started the engine, and backed out. The dealer came running out of the showroom and said he'd match my price. Businessmen will always tell you that prices aren't negotiable. That is a tactic for rubes.
  - deleted 6mo ago
    [deleted]
  - pdonis 6mo ago
    All of this is very nice--and irrelevant to the point under discussion. Under the scenario that the Maryland law is outlawing, the richer customer who is being charged the higher price by the grocery store still finds the product to be worth it to them at the higher price. And since their time has value, and they're just grocery shopping, and they're rich and not trying to pinch pennies, they'll just buy the thing at the price the store is asking. There will be less consumer surplus for them, as I said, than there would be if the store were charging them the same price as the average middle class person--but it's highly doubtful that it will be worth their time to try to extract that extra consumer surplus from the store. That's why stores want to price discriminate in the first place--because they know the richer customers won't bother trying to haggle over price.