Only under particular certain conditions. Under other conditions this is not so.
I edited my post before I checked to see if you had commented—remember that this is in the context of airlines, in which case it is absolutely true. We only have the modern air industry at the size and level of connections that it is because of the sophisticated price discrimination.
We only have the modern air industry at the size and level of connections that it is because of the sophisticated price discrimination.
That’s not self-evident to me, but we are venturing into counterfactuals by now.
In any case, I have no objection to companies trying to engage in price discrimination—they have full rights to attempt to do so. What I object to is the idea that I, as a consumer, cannot try to game their price discrimination schemes. The suggestion that I am morally obligated to meekly go along with whatever techniques companies devise to maximize their revenues is… strange to me :-D
That’s not self-evident to me, but we are venturing into counterfactuals by now.
Only tautological propositions are truly self-evident; the rest are evident only if you look for the evidence. (Specifically, consider the profit margin of the airline industry. If we believe that price discrimination raises their revenue, a world without that would imply less revenue and thus less profit, which would put it well into the negatives, forcing cutbacks on marginal routes until we have a significantly constrained industry and customers paying much higher prices on the margin.)
The suggestion that I am morally obligated to meekly go along with whatever techniques companies devise to maximize their revenues is… strange to me :-D
It’s standard reputational logic, or what people here are fond of calling “Newcomb-like” problems: only if enough people behave well enough will counterparties treat the public like they will behave. Trust is valuable, and social trust especially useful.
Only tautological propositions are truly self-evident; the rest are evident only if you look for the evidence.
...he said, before proceeding to give an a priori argument.
If anyone has any data about what the airline industry would look like without price discrimination I would be very interested to see it! Before this (fascinating) thread I had never thought about the issue. It’s really counterintutive, and I would be curious to know what the magnitude of the effect is.
...he said, before proceeding to give an a priori argument.
What? If the airline industry had, say, Intel’s or Apple’s profit margins, then the argument that I gave would not hold. I left out what their profit margins were because I figured everyone in the conversation would either know already or look them up.
If anyone has any data about what the airline industry would look like without price discrimination I would be very interested to see it!
Check out, say, section 3 of this paper. (In general, “revenue management” is the term of art.) This article claims it adds 4-8% in revenue.
It’s standard reputational logic, or what people here are fond of calling “Newcomb-like” problems: only if enough people behave well enough will counterparties treat the public like they will behave. Trust is valuable, and social trust especially useful.
I don’t see the relevancy to this subthread. You are not trying to say that if only everyone trusted large, not particularly high-functioning corporations everything would be just peachy—are you? X-/
Besides, trust them to do what exactly? I trust the airline to not deliberately overcharge my credit card and to not sell the information that I will be out of town to some burglars. I do not trust it to the extent of “Eh, just charge me whatever price you think is fair”, I am not going to trust it to that extent, and I think it’s a good thing, too.
I edited my post before I checked to see if you had commented—remember that this is in the context of airlines, in which case it is absolutely true. We only have the modern air industry at the size and level of connections that it is because of the sophisticated price discrimination.
That’s not self-evident to me, but we are venturing into counterfactuals by now.
In any case, I have no objection to companies trying to engage in price discrimination—they have full rights to attempt to do so. What I object to is the idea that I, as a consumer, cannot try to game their price discrimination schemes. The suggestion that I am morally obligated to meekly go along with whatever techniques companies devise to maximize their revenues is… strange to me :-D
Only tautological propositions are truly self-evident; the rest are evident only if you look for the evidence. (Specifically, consider the profit margin of the airline industry. If we believe that price discrimination raises their revenue, a world without that would imply less revenue and thus less profit, which would put it well into the negatives, forcing cutbacks on marginal routes until we have a significantly constrained industry and customers paying much higher prices on the margin.)
It’s standard reputational logic, or what people here are fond of calling “Newcomb-like” problems: only if enough people behave well enough will counterparties treat the public like they will behave. Trust is valuable, and social trust especially useful.
...he said, before proceeding to give an a priori argument.
If anyone has any data about what the airline industry would look like without price discrimination I would be very interested to see it! Before this (fascinating) thread I had never thought about the issue. It’s really counterintutive, and I would be curious to know what the magnitude of the effect is.
What? If the airline industry had, say, Intel’s or Apple’s profit margins, then the argument that I gave would not hold. I left out what their profit margins were because I figured everyone in the conversation would either know already or look them up.
Check out, say, section 3 of this paper. (In general, “revenue management” is the term of art.) This article claims it adds 4-8% in revenue.
I don’t see the relevancy to this subthread. You are not trying to say that if only everyone trusted large, not particularly high-functioning corporations everything would be just peachy—are you? X-/
Besides, trust them to do what exactly? I trust the airline to not deliberately overcharge my credit card and to not sell the information that I will be out of town to some burglars. I do not trust it to the extent of “Eh, just charge me whatever price you think is fair”, I am not going to trust it to that extent, and I think it’s a good thing, too.
P.S. I two-box :-P