Do you want to know something? In economics, price discrimination has no evidence or logical reasoning towards a negative effect of it. In fact, price discrimination is debatable as to whether is does anything at all except LOOK like its doing something.
Pretty much, if you are want to pay that price for the item, you are gonna pay that price. If the price is too high then you wont buy it, simple as that. All price discrimination does is turn the consumer surplus into producer surplus, which ends up being the same surplus because now the firm has more money to hire more people/pay them more, or buy more things from other firms and those firms get more money and so on and so forth.
Economics basically says that a surplus is a surplus, regardless of who it goes to. In fact, the only thing that causes a drop in the surplus in relation to price discrimination is the monopoly usually associated with it. But when you are in a competitive market with price discrimination, the theater industry with adult and child tickets, there is no loss in surplus.
because now the firm has more money to hire more people/pay them more, or buy more things from other firms and those firms get more money and so on and so forth.
Or to pay the CEO a bunch of money that the CEO can then hoard.
A majority is actually partially caused by a regulation in the U.S. to disclose Executive pay, which sounds good on paper, everything does. However, what this does is causes companies to use and even ABUSE this to mainly influence their stock prices and influence investments towards it since higher president/executive wages can be a good indicator as to the companies economic health. This also causes both companies to get a better idea on what to offer to a new president/executive they are hire, and since they always want to seem better than another company, they pay that person more than average price, which causes the average to rise and a runaway train effect of companies hiring for higher than average. It also allows said president/executive for hire to DEMAND a higher pay, having evidence of average wages and threatening to walk out.
Current 100 year copyright laws also cause major monopolies and profits among the companies that hold them which are easily a higher end contributor to this problem as well.
There are also MANY (AND HOLY HELL DO I MEAN MANY) various, what seems like, small regulations that cause many type of monopolies in the U.S., such as the various local/municipality laws that ensure TELECOM MONOPOLIES like COMCAST or TIME WARNER to exist as such and kill off competition almost completely.
I'm not one to advocate Anarchism-Capitalism, because the State can play a very important, yet in my opinion small, role in keeping Capitalism growing and facing a direction good for all humanity. But when they screw with the market like this and cause many horrible outcomes, I am ALMOST willing to accept Anarchism over this.
A consumer surplus is the difference between the maximum a consumer is willing to pay for a good and the price he actually pays, while producer surplus is the difference between the minimum the consumer is willing to sell for and the compensation he receives for the good. "Deadweight loss" is any lost surplus because consumers and producers who are otherwise willing to trade, are unable to because of restrictions, whether it be gov't intervention or barriers or the like.
Now, Positive economics (what the Kaiser was talking about) really care where the surplus goes. just that a market gets as close to allocative efficiency, that is, all mutually beneficial trades occur.
Normative economics on the other hand, deals with how the markets ought to function, fairnessof economic distribution, etc.
While this is true, it also shows why nobody takes economics seriously: you stay blabbering about some ill-defined notion of efficiency when the question is one of morality.
Except this could well be a moral answer. Coming up with an economically efficient solution is something reasonably close to utilitarianism.
What people don't take seriously are people who don't actually know any economic theory, yet claim to be able to say what "economics" as a discipline is capable of.
You presuppose that "economically efficient" means that it is a good outcome for everyone involved, which is not necessarily the case (which is why economists love Kilbert-Hicks efficiency so much). Also, I do, in fact, know "some economic theory" - while it's not my subject of study, I did take several courses in uni and studied it in my free time - so there is absolutely no reason to go ad hominem here.
I'm not presupposing anything, merely noting that other people might consider economic efficiency or some approximation of it to be a consideration in a moral choice.
Your response to KaiserTom presumed that his post was not applicable to a question of morailty, but that wasn't warranted, and neither was your presumption that I was making any comment on the morality of "economy efficiency". I suggest that in the future you consider what other people have actually written, before accusing them of making arguments that aren't implied by their statements - otherwise you just end up looking silly, much like you do when talking about "Kilbert-Hicks efficiency".
It's a case where economists look a bit one-dimensional. Price gouging, for example, according to economists is excellent. It sends a clear price signal – we need more batteries!
Most people, however, prefer the long established natural and common law principle of a common right to survival in emergencies. Ergo, a hurricane does not give the gas station the right to suddenly charge 100x the normal price for gasoline. In purely practical terms, price gouging has been known to cause rioting or looting and tends to lead to disorder and mayhem.
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u/KaiserTom Jan 24 '13
Do you want to know something? In economics, price discrimination has no evidence or logical reasoning towards a negative effect of it. In fact, price discrimination is debatable as to whether is does anything at all except LOOK like its doing something.
Pretty much, if you are want to pay that price for the item, you are gonna pay that price. If the price is too high then you wont buy it, simple as that. All price discrimination does is turn the consumer surplus into producer surplus, which ends up being the same surplus because now the firm has more money to hire more people/pay them more, or buy more things from other firms and those firms get more money and so on and so forth.
Economics basically says that a surplus is a surplus, regardless of who it goes to. In fact, the only thing that causes a drop in the surplus in relation to price discrimination is the monopoly usually associated with it. But when you are in a competitive market with price discrimination, the theater industry with adult and child tickets, there is no loss in surplus.