Stupid Pilot Tricks - Insurance Co. Trying to Back Out

"Teacherjh" wrote in message
...

If we value the same labour differently,
one of us does not have all the relevant information


Ice is more valuable to somebody with no freezer.

No, the person with the freezer may not have a need to buy ice, but if he
DOES buy it, he should be buying it for exactly the same value of money or
labour which the person without a freezer would pay. That is because the
maker/vendor of the ice spent a certain amount on materials, overhead, and
expects a certain amount of profit, and it should be the same no matter who
the buyer. Otherwise it becomes an aberration of the free-market which we
call price-gouging.

My labor is more valuable to
somebody who can't do what I just did.

.... true, but in return, his labor is valuable to you because he can do what
you cannot. That provides both of you with an incentive to work and add
value to the economy.

My knowledge is more valuable to
somebody who is partly ignorant ...(and of no value to somebody who is
wholely
ignorant or totally educated).

Your knowledge means something only when it is combined with labour to
create additional value in the economy. If you use the advantage of your
superior knowledge to undervalue someone elses labour, or distort facts
about contents and performance of a product, that is an aberration of the
free-market system which allows the wealthy to accumulate at the expense of
others, and even free market economies have to curtail that. I think one
example is called "insider trading".


Sometimes the value of a thing (concrete or not) is based on
circumstances, and
it doesn't take labor to change the circumstances.

No, I don't believe that. Circumstances cause inflation or deflation, but
they do not change the base value. Inflation and deflation are considered
disruptive charateristics of an economy, which Mr. Greenspan and the
Government try to control. Disruptive circumstances such as hurricanes or
desparation within segments of the poplulace cause short term price gouging
and the like. I would not consider this as a healthy aspect of a
free-market economy and we put mechanisms in place to control them. Does
that make these socialistic mechanisms bad policies?

A diplomat can change the
value of an atomic bomb by talking. An atomic bomb can change the value
of
milk if the diplomat doesn't talk well.

We are not talking politics here, we are talking economy.

A bomb is a negative on the economy, because if it is not used, it has
wasted labor, and if it IS used, it will destroy the fruits of other labor.
If it is used to destroy other bombs, that only means that somebody else's
labour was also wasted in the creation of THOSE bombs, and on and on in a
vicious circle. Building and using bombs is a presumption that we WILL have
losses, and all we are doing is cutting the losses, rather than attempting
to improve our growth.


What is the value of water in a bottle? Why is one person willing to pay
$5
and the person next to her unwilling to even carry it to the car if it's
free?


Because one of those people does not have all the information. Thus one of
these people is a "loser" in the economy. This has been argued several posts
back.

A free-and-open-market economy is not meant to have "losers". I do a little
work for you, you do a little work for me, we both gain. ...and so on and so
on.... If I choose to do little, I gain less than the guy who does more.
But this concept has morphed into something considerably different, where it
has become much easier to "win" (and lose), and where there are blatant
attempts to hide information so that a losers are created such that the rest
of us can win. Governemnts try to control this, (and to compensate for the
Market's errors) with a few socialistic policies.

This does not make them evil agents of the communist devil.

Our OT time is up, we now return you to your regular programming.

No, the person with the freezer may not have a need to buy ice, but if he
DOES buy it, he should be buying it for exactly the same value of money or
labour which the person without a freezer would pay. That is because the
maker/vendor of the ice spent a certain amount on materials, overhead, and
expects a certain amount of profit, and it should be the same no matter who
the buyer. Otherwise it becomes an aberration of the free-market which we
call price-gouging.


There is no reason that he =should= be buying it for exactly the same price.
Who is going to dictate that price? (especially if you reject the idea that
the individuals who =make=up= the market shouldn't.


My labor is more valuable to
somebody who can't do what I just did.

.... true, but in return, his labor is valuable to you because he can do what
you cannot. That provides both of you with an incentive to work and add
value to the economy.


While this (incentive thing) may be true, it is irrelevant to my point, which
is that my labor (or anything) does not have a fixed value, but a value that is
dependent on to whom, when, and how it is presented. Just like ice to eskimos.


Your knowledge means something only when it is combined with labour to
create additional value in the economy.


My knowledge (such as of a better process) can allow me to =avoid= labor. It
can allow me to get along =without= buying something. It can keep me healthy
in the face of McDonalds. It can keep my airplane (obligatory reference) out
of the repair shop, and it can do so =without= labor. Giving this knowlege to
others (free or at a price) to allow them to reap the same benefits is of
value, but only to those who don't have that knowlege already, and know that it
would be helpful to them.

Disruptive circumstances such as hurricanes...

Hurricaines and such are not disruptive; we only see them that way because we
look short term. An engine overhaul is not an "extraordinary disruptive
expense" either. It is an expected part of flying, and one the intellegent
airplane owner counts on having (see my knowledge point above). It's
disruptive only if you do not have a reserve built in. "The market" does not
build in a reserve for hurricaines, though the insurance industry makes a
start.

[re. A-bombs and milk] We are not talking politics here, we are talking
economy.

They are interrelated. I have a piece of land I'd like to develop. It's zoned
for four acre housing, and is vacant. I can sell it for no more than $10,000
an acre. I make nice to the town council, they vote to rezone the land for
"mixed use", which includes businesses and quarter acre housing. Now I can
sell this land for ten times as much. It's the same land.


What is the value of water in a bottle? Why is one person willing to pay $5
and the person next to her unwilling to even carry it to the car if it's
free?


Because one of those people does not have all the information. Thus one of
these people is a "loser" in the economy.


Nope. One person is not thirsty and has good tap water at home. The other has
tap water that tastes of salt and chlorine. It has nothing to do with
information, and everything to do with circumstances. Nobody is a loser.

So how much is the water "worth"? The real answer is "to whom?". The concept
of "the market" is a convenient abbreviation for very complex forces, and is
very useful. However, when examined too closely, it fails.

This is ok... it's just a convenient moniker. But don't mistake it for a real
force in its own right.

Jose


--
(for Email, make the obvious changes in my address)

Teacherjh wrote:

There is no reason that he =should= be buying it for exactly the same
price.

The idea of a fixed price, as opposed to each transaction involving
negotiation, is a relatively recent innovation. How this innovation has
become a Law of the Universe, I cannot say.

But look at how angry people became when Amazon experimented with the old
fashioned approach.

Apparently, the "shopping for the lowest price" permitted by the Internet is
a Good Thing, while "shopping for the consumer willing to pay the highest
price" is a Bad Thing.

No, that's not quite right. This is accepted in auctions. Maybe only
stores aren't permitted to work in their own best interests.

- Andrew

But look at how angry people became when Amazon experimented with the old
fashioned approach. ["customized" pricing]


Amazon did it the sneaky way, by (as some economists might put it) taking
advantage of the consumer's ignorance, and of their special knowledge of each
individual consumer (gained through logging their purchases, and perhaps even
spying on their web surfing and correlating it with other databases). This is
a Bad Thing, no matter who does it, be it the credit card companies, the
neighbor across the street, a high school student in Pakistan, or the TSA.

Amazon pulled a fast one.

Jose


--
(for Email, make the obvious changes in my address)

"Teacherjh" wrote in message
...
Amazon did it the sneaky way, by (as some economists might put it) taking
advantage of the consumer's ignorance, and of their special knowledge of
each
individual consumer (gained through logging their purchases, and perhaps
even
spying on their web surfing and correlating it with other databases).

"Perhaps even"? Come on...at least stick to known facts.

As for their actual documented techniques, while I understand many people
found the concept offensive, I fail to see how what Amazon was doing is any
different from "the old fashioned approach" to which Andrew refers. It used
to be, you shopped with someone that got to know you very well. Negotiating
the price depended almost entirely on that person's knowledge of you and
your buying habits, and everyone got a different price.

Not everyone thinks that sort of commerce is a good thing, but the beauty of
our system is that no one is forcing you to buy stuff from Amazon. Don't
like them, either because of their prices or their marketing, just go
somewhere else.

If it's truly a "Bad Thing", they won't be able to afford continuing the
practice.

Pete

Teacherjh wrote:
But look at how angry people became when Amazon experimented with the old
fashioned approach. ["customized" pricing]


Amazon did it the sneaky way, by (as some economists might put it) taking
advantage of the consumer's ignorance, and of their special knowledge of each
individual consumer (gained through logging their purchases, and perhaps even
spying on their web surfing and correlating it with other databases). This is
a Bad Thing, no matter who does it, be it the credit card companies, the
neighbor across the street, a high school student in Pakistan, or the TSA.

Well if you're talking about customized pricing then the credit card
companies charge different interest rates depending on whether you
got their 'teaser' rate, your credit score, how long you've been with
them, etc.; the neighbor across the street (in other words a case where
you know the seller) probably will sell his used items to you at a
different price depending on whether you're a relative, close friend,
casual acquaintance, etc.; the student in Pakistan is likely to
negotiate the price of anything; and I wouldn't trust the TSA enough
to buy from them no matter what the price.

Peter said: (quoting (Jose))

Amazon did it the sneaky way, by (as some economists might put it) taking
advantage of the consumer's ignorance, and of their special knowledge of each
individual consumer (gained through logging their purchases, and perhaps even
spying on their web surfing and correlating it with other databases). This
is
a Bad Thing, no matter who does it, be it the credit card companies, the
neighbor across the street, a high school student in Pakistan, or the TSA.

Well if you're talking about customized pricing then the credit card
companies charge different interest rates depending on whether you
got their 'teaser' rate, your credit score, how long you've been with
them, etc.; the neighbor across the street (in other words a case where
you know the seller) probably will sell his used items to you at a
different price depending on whether you're a relative, close friend,
casual acquaintance, etc.; the student in Pakistan is likely to
negotiate the price of anything; and I wouldn't trust the TSA enough
to buy from them no matter what the price.


It's not the custom pricing that is the Bad Thing. It is the deception, the
misuse of the expectation of a fixed price and Amazon's one-way knowledge of
its customers, that is the Bad Thing. In your other examples, either there
isn't an expectation of a fixed price (credit card rates should depend on the
risk, as do insurance rates), or the transactions is on a more even footing
(you probably know or have the opportunity to know your neighbor as well as
they know you).

And the TSA is selling us a bill of goods whether we buy or not.

My point however is that the =value= of a thing differs from case to case, and
is not intrinsic. To the extent that things are fungible and demand is fairly
steady, a value (and therefore a price) tends to settle out, but an economic
theory that asserts that variations in price are just based on "lack of
information", and/or all trade is zero sum, is deeply flawed.

Jose







--
(for Email, make the obvious changes in my address)

I fail to see how what Amazon was doing is any
different from "the old fashioned approach" to which Andrew refers. It used
to be, you shopped with someone that got to know you very well. Negotiating
the price depended almost entirely on that person's knowledge of you and
your buying habits, and everyone got a different price.


The customized price isn't the Bad Thing. The deception and misuse of a very
one-sided information exchange (Amazon knows everything useful about you, you
know nothing useful about the decisionmakers at Amazon) that is the Bad Thing,
and it (one sided information exchange) will only lead to more Bad Things.

Jose



--
(for Email, make the obvious changes in my address)

Price gouging saves lives... read below.

http://www.mises.org/fullstory.aspx?control=3D1593

In my opinion there is no such thing as 'price gouging' in a free =
market. I should be able to sell whatever I want for whatever the =
market can bear. Why do you think the price of oil is up? Plain and =
simple... supply and demand. If supply shrinks while demand stays the =
same, the price goes up. That is the free market.

Jerry

"Icebound" wrote in message =
...
=20
"Teacherjh" wrote in message
...

If we value the same labour differently,
one of us does not have all the relevant information


Ice is more valuable to somebody with no freezer.
=20
No, the person with the freezer may not have a need to buy ice, but if =
he
DOES buy it, he should be buying it for exactly the same value of =
money or
labour which the person without a freezer would pay. That is because =
the
maker/vendor of the ice spent a certain amount on materials, overhead, =
and
expects a certain amount of profit, and it should be the same no =
matter who
the buyer. Otherwise it becomes an aberration of the free-market =
which we
call price-gouging.
=20
My labor is more valuable to
somebody who can't do what I just did.
=20
... true, but in return, his labor is valuable to you because he can =
do what
you cannot. That provides both of you with an incentive to work and =
add
value to the economy.
=20
My knowledge is more valuable to
somebody who is partly ignorant ...(and of no value to somebody who =
is
wholely
ignorant or totally educated).
=20
Your knowledge means something only when it is combined with labour to
create additional value in the economy. If you use the advantage of =
your
superior knowledge to undervalue someone elses labour, or distort =
facts
about contents and performance of a product, that is an aberration of =
the
free-market system which allows the wealthy to accumulate at the =
expense of
others, and even free market economies have to curtail that. I think =
one
example is called "insider trading".
=20

Sometimes the value of a thing (concrete or not) is based on
circumstances, and
it doesn't take labor to change the circumstances.
=20
No, I don't believe that. Circumstances cause inflation or deflation, =
but
they do not change the base value. Inflation and deflation are =
considered
disruptive charateristics of an economy, which Mr. Greenspan and the
Government try to control. Disruptive circumstances such as =
hurricanes or
desparation within segments of the poplulace cause short term price =
gouging
and the like. I would not consider this as a healthy aspect of a
free-market economy and we put mechanisms in place to control them. =
Does
that make these socialistic mechanisms bad policies?
=20
A diplomat can change the
value of an atomic bomb by talking. An atomic bomb can change the =
value
of
milk if the diplomat doesn't talk well.
=20
We are not talking politics here, we are talking economy.
=20
A bomb is a negative on the economy, because if it is not used, it has
wasted labor, and if it IS used, it will destroy the fruits of other =
labor.
If it is used to destroy other bombs, that only means that somebody =
else's
labour was also wasted in the creation of THOSE bombs, and on and on =
in a
vicious circle. Building and using bombs is a presumption that we =
WILL have
losses, and all we are doing is cutting the losses, rather than =
attempting
to improve our growth.
=20

What is the value of water in a bottle? Why is one person willing to =
pay
$5
and the person next to her unwilling to even carry it to the car if =
it's
free?

=20
Because one of those people does not have all the information. Thus =
one of
these people is a "loser" in the economy. This has been argued several =
posts
back.
=20
A free-and-open-market economy is not meant to have "losers". I do a =
little
work for you, you do a little work for me, we both gain. ...and so on =
and so
on.... If I choose to do little, I gain less than the guy who does =
more.
But this concept has morphed into something considerably different, =
where it
has become much easier to "win" (and lose), and where there are =
blatant
attempts to hide information so that a losers are created such that =
the rest
of us can win. Governemnts try to control this, (and to compensate =
for the
Market's errors) with a few socialistic policies.
=20
This does not make them evil agents of the communist devil.
=20
Our OT time is up, we now return you to your regular programming.
=20

What you folks are discussing is known to economists as "pricing
discrimination," and it is rampant in the American economy.

It would be an exaggeration to say that "everybody does it," but not
by much.

It would take me all night to list all the examples of pricing
discrimination I know about, and I'm sure I don't know about all of
them. Movie theatres charge more at night than in the afternoon, and
charge kids less than adults. Miami hotels charge less in summer than
in winter. Airline fares are notoriously discriminitory. The bus
line in this town lets old folks ride free--the ultimate in pricing
discrimination. Many if not most maker of brand-name products sell
the same product to chain drug stores and supermarkets at lower
prices, to be sold as generics or private labels.

Some pricing discrimination is requried by law. For example,
hospitals that receive federal funding are required to treat indigent
patients free of charge.

vince norris