Legality, Economy and Price

[Thaluikhain]

I mean is life all about how you can "scam" someone to the highest and still be legal?

Capitalism, especially with luxury goods, generally is, yes. Life in general, no, unless you're a hardcore capitalist.

So now I have to pay higher price because of those people can pay higher? How is that fair?

Who said it was fair? People will charge what they like, usually as high as they can, unless someone else prevents them. Often, this is considered very unfair, tied closely with poverty.

Very hard for society to stop that, even assuming the government wants to and isn't in on it. People have been trying for thousands of years, limited success. Normally when there's some emergency like a war and worries about war profiteers. During the Peloponesian War, in Athens you couldn't sell grain at a price more than one obol per phormos you bought it, or you faced the death penalty, for example.

If you need to pay someone a hundred bucks to hear them say that your mother is at peace now that she's dead and that makes you sleep better, is it better or worse then paying a hundred bucks over the course of a year to get sleeping pills? A lottery can provide you with a sense of thrill and excitement, so how is that worse then paying to go on a rollercoaster ride?

The former implies deceit, though, the latter should be transparent.

 

[Siyano_v1legacy]

Is the buyer happy with their purchase of 100 USD "Norwegian Glacier Ice"-ice cubes (real thing, by the way)? If so, what's the problem? Exclusivity is a part of the appeal of many high end or luxury products and services, which is why a pair of slacks marked with Gucci will set you back 300 USD instead of 30 for Walmart's Finest. As long as I am ready to pay 300 USD to get a really exclusive pair of slacks and you can find a pair of bargain bin 10 USD slacks, what's the problem?

The problem is why are you paying 300$ if you can pay 10 or 15$, if in the end it the same object or close?


Peace of mind and the placebo effect are both real and have value. What? Placebo may be real, so? I dont see how it can have value, it called placebo for a reason, having effect on nothing, like drinking water and thinking it energize you.

If you need to pay someone a hundred bucks to hear them say that your mother is at peace now that she's dead and that makes you sleep better, is it better or worse then paying a hundred bucks over the course of a year to get sleeping pills? hmm, well, in one a person is paying for being lied too?!

A lottery can provide you with a sense of thrill and excitement, so how is that worse then paying to go on a rollercoaster ride? Lottery is false, easy.

Where this ends, obviously, is when the hoax is detrimental to your health. A homeopath that tells you to take more salvia-infused water to battle your cancer instead of seeing an oncologist should be driven out of town. A casino that lets you gamble away every last thing you own should not have a license. But if you think you feel better when you drink "gold infusions" to get more energy or have a great time while gambling responsibly at a casino, what's the harm?

Well then, it getting detrimental to my health, it hard to pay for the every day stuff because some people can pay more for it and for no reason. So, what exactly is this not a bad thing compare to any of these?
Anyway, I feel like there no way to change people mind on this and not to "stupidly" spend 1000$ just because it as a logo on it...

 

[Marik2]

You should see the price of stuff in Brazil.

You should see the price of stuff in Brazil.

Or Argentina.

Cuanto es?

 

[TheIronRuler]

You can vote to keep those foreigners out altogether, restrict their purchasing power, tax their purchases to fund public housing for citizens, force them to add their property as rent-controlled estates, force rent-control... these issues are something you can vote for, and if they are not topics of interest by your politicians, you can certainly campaign for them and convince them that it is. If you are convinced this is a major issue them I guarantee your demands will be backed by others who think similarly. If you can make your real-estate market untenable to invest in as a foreign investor, you will inevitably reduce these kinds of purchases and the prices will go down in time.

Chinese investors buy property in Canada because they need to hide their money in case the worst comes to PRC. You can address either issue - the PRC itself being an authoritarian communist state with free-trade zones which allow for small-time capitalists to thrive, but under the thumb of the party, or... be a nationalist and demand restrictions on foreign-nationals buying property.

Canada has one of the most inflated real-estate bubbles in the world, thanks in part to this issue. You can vote for someone who isn't an idiot that could address that.

You could also complain about mark-ups but forget to mention the actual issue you're discussing here.

 

[Worgen]

People are very stupid, we also tend to think of things that are more expensive as having more value and will actually be suspicious of things that we think are cheaper then they should be. So sellers can actually be selling 2 of the same product but having one be more expensive then the other can actually make it sell better if the products look similar but different just enough.

 

[CaitSeith]

The problem is why are you paying 300$ if you can pay 10 or 15$, if in the end it the same object or close?

They already told you: exclusivity for the rich. They do something similar with common cars versus luxury cars.

 

[Frezzato]

OP, it's a marketing strategy. I can't remember the name of it. Something akin to 'loss leader'.

The idea is you sell tobacco products and gasoline (usually at competitive prices), and lottery tickets (at the same state-mandated price) and hope that someone buys an additional item out of convenience. Like a doorbuster during black Friday.

On a related note, I'm the worst type of customer. I see a game or shiny new thing I want and...I wait. Sometimes two, three years, I'll just wait. If it goes down in price, I'll buy it. Otherwise it's no big deal to me to never buy it.

This is in stark contrast to how I used to be. Delayed gratification is an art form.

 

[Frezzato]

People are very stupid, we also tend to think of things that are more expensive as having more value and will actually be suspicious of things that we think are cheaper then they should be. So sellers can actually be selling 2 of the same product but having one be more expensive then the other can actually make it sell better if the products look similar but different just enough.

Warby Parker originally wanted to sell their eyeglass frames for $50, which would still have netted them a profit. As their business idea was originally created while the founders were attending business school, they approached their professor for guidance. He told them they had to charge more because people, for the most part, associate cost with value.

 

[Worgen]

People are very stupid, we also tend to think of things that are more expensive as having more value and will actually be suspicious of things that we think are cheaper then they should be. So sellers can actually be selling 2 of the same product but having one be more expensive then the other can actually make it sell better if the products look similar but different just enough.

Warby Parker originally wanted to sell their eyeglass frames for $50, which would still have netted them a profit. As their business idea was originally created while the founders were attending business school, they approached their professor for guidance. He told them they had to charge more because people, for the most part, associate cost with value.

Yeah, its the perception of value that really messes with our minds. Like, if we see two items that are the same price but one is on 'sale' from a higher price, we will probably go for the one on sale since we perceive that one as better and part of the problem is even if you know this is a thing, its hard to fight against.

 

[Seanchaidh]

There is generally a pretty large difference between what one would be willing to pay for a good or service absent any alternatives (especially obvious for something like a monopoly on food) and how much a producer would be willing to provide it for in the absence of any other bids. In many cases, participants in an economy are encouraged to take as much of that consumer/producer surplus for themselves as they can; in the example of a bar or restaurant (or most any retailer), the establishment can (and does) add substantially to the prices it could otherwise expect in a competitive marketplace by preventing competition on its premises.

 

[Johnny Novgorod]

You should see the price of stuff in Brazil.

You should see the price of stuff in Brazil.

Or Argentina.

Cuanto es?

Everything's marked up by about 50% and nothing ever goes down in price.

 

[Siyano_v1legacy]

I guess I just dont get how all this works really, I mean if we can up the price of a object every now and then, that company make more money, thus able to pay more for their employee and thus that employe can spen more on another object thus making that object cost more, etc.. this is a uphill spiral with no end, because where does it stop? when milk cost 1 millions and you average salary is 20 millions per hour?
Also the buying power we have today is way less than say 50 years ago, because well, the difference of "richier" people than poor, since poor people buy less they have a lower impact of the price of an object while richier people can spend without problem.

If you look at say http://www.mybudget360.com/wp-content/uploads/2015/08/cost-of-living-chart.jpg
You can clearly see, we have less money and everything cost more in general (except milk and egg)

Also that now money value is based of nothing, back then it was based of the value of gold but in today economy, nothing, totally abstract, so how exactly does this work? So my money as no value and the what I can pay for it is based on nothing, rather than just an somewhat average of the highest I can possibly do.
I guess it doesnt make sense to me...

 

[Worgen]

I guess I just dont get how all this works really, I mean if we can up the price of a object every now and then, that company make more money, thus able to pay more for their employee and thus that employe can spen more on another object thus making that object cost more, etc.. this is a uphill spiral with no end, because where does it stop? when milk cost 1 millions and you average salary is 20 millions per hour?
Also the buying power we have today is way less than say 50 years ago, because well, the difference of "richier" people than poor, since poor people buy less they have a lower impact of the price of an object while richier people can spend without problem.

If you look at say http://www.mybudget360.com/wp-content/uploads/2015/08/cost-of-living-chart.jpg
You can clearly see, we have less money and everything cost more in general (except milk and egg)

Also that now money value is based of nothing, back then it was based of the value of gold but in today economy, nothing, totally abstract, so how exactly does this work? So my money as no value and the what I can pay for it is based on nothing, rather than just an somewhat average of the highest I can possibly do.
I guess it doesnt make sense to me...

It makes perfect sense, its just stupid and probably not sustainable. Companies will try and charge as much as they can for something while paying as little as they can for employees. Right now a company is much more responsible (couldn't think of the right word at the moment) to shareholders and investors then anyone else and both those groups want big short term increases in value and constant increases in value. But doing that means kinda ignoring your employees and even customers. We see this a lot with video games and how ea, activision, and other aaa companies behave with yearly sequels that are 'safe.'

 

[Silentpony_v1legacy]

OP, it's a marketing strategy. I can't remember the name of it. Something akin to 'loss leader'.

The idea is you sell tobacco products and gasoline (usually at competitive prices), and lottery tickets (at the same state-mandated price) and hope that someone buys an additional item out of convenience. Like a doorbuster during black Friday.

On a related note, I'm the worst type of customer. I see a game or shiny new thing I want and...I wait. Sometimes two, three years, I'll just wait. If it goes down in price, I'll buy it. Otherwise it's no big deal to me to never buy it.

This is in stark contrast to how I used to be. Delayed gratification is an art form.

Is it really delayed gratification if you're okay with not getting it though? Like to me the delayed part would imply you're 100% sure you'll buy it one day, almost kinda regardless of price. But that you're okay with not having something says more 'wise spending and contentedness in missing out'
Yeah Bioshock 4 does look good, but its $1100 and requires you to sign away the rights to your blood and teeth. Sad I'll miss it, happy I'm not making that transaction.

I'm similar but I'll just never pay full price. Nothing, no game or experience, is ever worth the price marketers say it is. If a game is worth $60 to Steam, its only worth between $30-$45 to me. If it gets into that window and I wanted it, i'll get it.

 

[CaitSeith]

I guess I just dont get how all this works really, I mean if we can up the price of a object every now and then, that company make more money, thus able to pay more for their employee and thus that employe can spen more on another object thus making that object cost more, etc.. this is a uphill spiral with no end, because where does it stop? when milk cost 1 millions and you average salary is 20 millions per hour?

Which milk brand? Your example only applies if only one milk brand is available (or all brands agree on not having different prices). A cheaper milk brand can make more profit than an expensive one by selling by volume. Maybe one individual can afford a $1 million milk, but $10 milk sold to 2 million people is more profitable. Besides, if no cheaper milk was available, no one would buy it, because people has more important needs than just milk.

However, you are into something when you ask where does it stop. It doesn't. Several countries do a dirty trick when it goes to far: to change to a new currency whose value is equal to 1,000 or 1,000,000 times to the older one. Mexico did that in the 90's after an economic crisis.

Also the buying power we have today is way less than say 50 years ago, because well, the difference of "richier" people than poor, since poor people buy less they have a lower impact of the price of an object while richier people can spend without problem.

If you look at say http://www.mybudget360.com/wp-content/uploads/2015/08/cost-of-living-chart.jpg
You can clearly see, we have less money and everything cost more in general (except milk and egg)

You're right in the decrease of buying power; but not in the cause. As I said, more people buying stuff at reasonable prices is more profitable than a few select rich buying really expensive stuff.

Also that now money value is based of nothing, back then it was based of the value of gold but in today economy, nothing, totally abstract, so how exactly does this work? So my money as no value and the what I can pay for it is based on nothing, rather than just an somewhat average of the highest I can possibly do.
I guess it doesnt make sense to me...

That's... really complicated. When the money's value stopped being based on gold, the general public barely noticed the difference, because they were used the same way than beforehand.

Spoiler: This TED-Ed video is a decent simplification to watch as an introduction

https://www.youtube.com/watch?v=XNu5ppFZbHo

 

[Drathnoxis]

Which milk brand? Your example only applies if only one milk brand is available (or all brands agree on not having different prices). A cheaper milk brand can make more profit than an expensive one by selling by volume. Maybe one individual can afford a $1 million milk, but $10 milk sold to 2 million people is more profitable. Besides, if no cheaper milk was available, no one would buy it, because people has more important needs than just milk.

Milk makes your bones into armor that you wear under your skin. No need is more important than milk.

 

[CaitSeith]

Which milk brand? Your example only applies if only one milk brand is available (or all brands agree on not having different prices). A cheaper milk brand can make more profit than an expensive one by selling by volume. Maybe one individual can afford a $1 million milk, but $10 milk sold to 2 million people is more profitable. Besides, if no cheaper milk was available, no one would buy it, because people has more important needs than just milk.

Milk makes your bones into armor that you wear under your skin. No need is more important than milk.

Zero milk gives you brittle bones. Zero shelter gives you no place to store milk.

 

[Drathnoxis]

Which milk brand? Your example only applies if only one milk brand is available (or all brands agree on not having different prices). A cheaper milk brand can make more profit than an expensive one by selling by volume. Maybe one individual can afford a $1 million milk, but $10 milk sold to 2 million people is more profitable. Besides, if no cheaper milk was available, no one would buy it, because people has more important needs than just milk.

Milk makes your bones into armor that you wear under your skin. No need is more important than milk.

Zero milk gives you brittle bones. Zero shelter gives you no place to store milk.

You store the milk within yourself. Become the shelter.