Comment Re:See Amazon as an example (Score 1) 115
I don't think price inputs for a product are an essential part of free markets; in the end, the Rational Consumer (TM) only cares about the perceived quality of the product and the cost. If widget maker A is selling widgets for $2, and widget maker B is selling widgets of the same quality for $2.10, but widget maker A only pays $0.10 in input costs while B pays $0.50 - you should still go with widget maker A's product, even though their margins are higher.
The point about private deals, not knowing what other people were paying for something is appreciated and correct in that sense, but it's not really applicable to retail products. If I go to Wal-Mart/Macy's/whatever, I know what other people are paying - I can see the price tag. That's how people respond to price signals. The price of my preferred brand of pasta just went up 50%? Maybe I'll try a different one.
Companies also respond to price signals; they'll try to lock in predictable prices and attempt to switch suppliers if costs get out of hand.
The point about private deals, not knowing what other people were paying for something is appreciated and correct in that sense, but it's not really applicable to retail products. If I go to Wal-Mart/Macy's/whatever, I know what other people are paying - I can see the price tag. That's how people respond to price signals. The price of my preferred brand of pasta just went up 50%? Maybe I'll try a different one.
Companies also respond to price signals; they'll try to lock in predictable prices and attempt to switch suppliers if costs get out of hand.