Later on in the story there is stuff handling “rational revenge” where a dath ilani that is subject to a theft of a shirt with the cost of tracking down the thief being more than the value of the shirt.
This is also why it’s not irrational to spend more than $5 in time and gas to save $5 on a purchase.
With the purchase, it seems more like splitting the surplus. It does benefit you to have a store nearby that sells things at a lower price than you would have to pay in total by going to the less convenient store. The question is, how much of that gain is being captured by the store owner, and how much by you? If you think that they are capturing “too much” of the gains by the prices they set, then it can be rational to refuse the offer (just as in the Ultimatum Game).
One question is whether they can provide enough evidence that the division is reasonably fair. Maybe it is! There may be legitimate costs or extra risk that the local shop owner incurs versus the alternative.
Another question is what the other potential customers are likely to do. If most of them will shop there even when the owner is capturing 80% of the surplus and leaving the customers with only 20%, then it is likely not in the owner’s interest to lower the prices much below 80% surplus capture. If the other customers are likely to recognize when the shop owner is capturing too much surplus (as would happen in dath ilan), then it may not be worthwhile to set the prices higher than 50% capture.
I think the logic is actually importantly different.
I thought that the inconvenient property of robbers is that they impose their transaction on you involuntarily. Shops don’t / can’t impose their effect in the same way. I don’t see ilani making a moral commitment to foster the best deals in the same way that they declare possibly exisistenial war at the drop of the hat for the the tiniest unilateralist harm.
If the logic would apply to shops then I would wonder that if the instituion of goverment etc is worth for the individuals say 15 units but in order to have it people need to choose a 5 utility option over a 10 utility option one could argue that loss of that local optimization is worth the global optimization. The costs just being an acceptable cost of coordination. But it seems to be atleast the local sentiment is that if becoming more Homo Economicus makes goverment collapse then this proves the system is flawed.
There is the story beat where young Keltam asks for his share of rent income of all the land. It feels like there is either wiggling in that how this is not bad imposing or that the ownership is an unreal fiction. Why taking a shirt is bad but unbreakble loss of control over your lands is fine?
The relevant property isn’t that someone imposes something on you, but rather that you wish to discourage the behavior in question. Going to the store that charges you less 1) saves you $5 and 2) discourages stores from setting prices that are more expensive than other stores by an amount which is less than the transaction cost of shopping at the other store. This benefits you more than saving $5 does all by itself. In fact, if you make a binding precommitment to shop at the other store even if it costs you $6 more, the store will take this into account and probably won’t set the price at $5 more in the first place. (And “‘irrationally’ but predictably being willing to spend money to spite the store” is the way humans precommit.)
If it costs the shop to provide ther item near you 5$ because they can benefit from mass transit but moving the item to your location costs you 6$ because you can’t. You could be punishing the service of making items available near your location.
Also in this case the price difference is more than the transaction cost to you.
Even in the case that the punishment works you might end up in a situation where you drive the near store to bankruptcy because they can’t afford the lesser price. So you end up getting the same item and paying $1 more for it. This seems like an instance of an empty threat working out only conditional that it will be heeded.
With the shirt the point is not to convince the robber but the order enforcement. Maybe I could understand if the price could somehow be deemed “wrong” but it being financially not perfectly optimal for you in particular is far from being forbidden conduct.
If it costs the shop to provide ther item near you 5$ because they can benefit from mass transit but moving the item to your location costs you 6$ because you can’t. You could be punishing the service of making items available near your location.
Sure. The fact that putting pressure on the other store is an additional benefit beyond your savings doesn’t mean that putting pressure is worth any arbitrary amount. There are certainly scenarios where shopping at the cheaper store that is expensive to reach is a bad idea.
But it’s not bad just because it costs more to reach than you save on price, which is the typical rationalist line about such things.
This is also why it’s not irrational to spend more than $5 in time and gas to save $5 on a purchase.
With the purchase, it seems more like splitting the surplus. It does benefit you to have a store nearby that sells things at a lower price than you would have to pay in total by going to the less convenient store. The question is, how much of that gain is being captured by the store owner, and how much by you? If you think that they are capturing “too much” of the gains by the prices they set, then it can be rational to refuse the offer (just as in the Ultimatum Game).
One question is whether they can provide enough evidence that the division is reasonably fair. Maybe it is! There may be legitimate costs or extra risk that the local shop owner incurs versus the alternative.
Another question is what the other potential customers are likely to do. If most of them will shop there even when the owner is capturing 80% of the surplus and leaving the customers with only 20%, then it is likely not in the owner’s interest to lower the prices much below 80% surplus capture. If the other customers are likely to recognize when the shop owner is capturing too much surplus (as would happen in dath ilan), then it may not be worthwhile to set the prices higher than 50% capture.
I think the logic is actually importantly different.
I thought that the inconvenient property of robbers is that they impose their transaction on you involuntarily. Shops don’t / can’t impose their effect in the same way. I don’t see ilani making a moral commitment to foster the best deals in the same way that they declare possibly exisistenial war at the drop of the hat for the the tiniest unilateralist harm.
If the logic would apply to shops then I would wonder that if the instituion of goverment etc is worth for the individuals say 15 units but in order to have it people need to choose a 5 utility option over a 10 utility option one could argue that loss of that local optimization is worth the global optimization. The costs just being an acceptable cost of coordination. But it seems to be atleast the local sentiment is that if becoming more Homo Economicus makes goverment collapse then this proves the system is flawed.
There is the story beat where young Keltam asks for his share of rent income of all the land. It feels like there is either wiggling in that how this is not bad imposing or that the ownership is an unreal fiction. Why taking a shirt is bad but unbreakble loss of control over your lands is fine?
The relevant property isn’t that someone imposes something on you, but rather that you wish to discourage the behavior in question. Going to the store that charges you less 1) saves you $5 and 2) discourages stores from setting prices that are more expensive than other stores by an amount which is less than the transaction cost of shopping at the other store. This benefits you more than saving $5 does all by itself. In fact, if you make a binding precommitment to shop at the other store even if it costs you $6 more, the store will take this into account and probably won’t set the price at $5 more in the first place. (And “‘irrationally’ but predictably being willing to spend money to spite the store” is the way humans precommit.)
If it costs the shop to provide ther item near you 5$ because they can benefit from mass transit but moving the item to your location costs you 6$ because you can’t. You could be punishing the service of making items available near your location.
Also in this case the price difference is more than the transaction cost to you.
Even in the case that the punishment works you might end up in a situation where you drive the near store to bankruptcy because they can’t afford the lesser price. So you end up getting the same item and paying $1 more for it. This seems like an instance of an empty threat working out only conditional that it will be heeded.
With the shirt the point is not to convince the robber but the order enforcement. Maybe I could understand if the price could somehow be deemed “wrong” but it being financially not perfectly optimal for you in particular is far from being forbidden conduct.
Sure. The fact that putting pressure on the other store is an additional benefit beyond your savings doesn’t mean that putting pressure is worth any arbitrary amount. There are certainly scenarios where shopping at the cheaper store that is expensive to reach is a bad idea.
But it’s not bad just because it costs more to reach than you save on price, which is the typical rationalist line about such things.