I’m not a libertarian (though I play one on TV) but I think the party line is something like:

If a seller can convince customer A to pay more for goods or services than customer B (for any reason as long as force is not used) then that’s just fine and dandy, what’s the problem, you statist you?

Since, you know, empathy isn’t a strong point for most libertarians they assume that since they won’t pay higher prices if they can get out of it then it’s not a problem if someone else does. This is because many libertarians write as if they are, you know, cheap bastards.

Because if somebody tries to overcharge Customer Y she can, “according to principle”, go find somebody else who won’t, and in the long run her bargaining will get one of them down to Customer X’s price.

It’s also possible that Customer Y won’t bargain as hard as Customer X because she doesn’t need to, and she’ll end up paying a higher price.

Unless this is a trick question because Libertarians use pure silver “Freedom Dollars” or something like that, in whch case they both get laughed out of the store.

The more intriuging question is: Post communist Russia wonderland of the invisable hand or fucking nightmare that no country wants to emulate.

Seriously. That shit is fucked up. Granted, the corruption in Russia goes back to pretty mucht the Tsars, but how do you argue that Russia isn’t tjust the late stages of an Oligharcian (sorry Libertarian) paradise.

Best answer? You’d have to walk around with a current W2 to buy beer and condoms.

Customer Y will pay LESS than Customer X does, because Customer Y can buy dozens of fleshlights and tanker trucks full of Code Red.

However, Customer Y’s money will go to private armed security guards, body armor, vehicle armor and helicopter fuel for guarding against the mobs of X’s who are using their constitutionally provided armaments to try and take Customer Y’s mansion and yacht, the X’s generally starving and not having read that coercion is immoral, and wanting very much to coerce Customer Y out of his wealth.

The amount that Customer Y must spend to defend and protect his mansion and yacht and family, in addition to forcing him and and his family to live like prisoners in a very luxurious and spacious jail, probably approximates the amount Customer Y might spend on taxation. However, Customer Y can sleep easy in knowing that the poor are to be killed instead of helped, which, being a LIbertarian, makes him sleep soundly and peacefully at night knowing nobody, anywhere, will ever even slightly risk getting something for nothing. Except him, because his bank account is earning interest.

This doesn’t answer your question, but I’m given to considering social engineering experiments: why not price necessities as a percentage of annual income rather than a set price (percentage of GDP, if you wish.)

For example, I own a grocery store. The price tag on my bread says “.00005%”; someone making $20,000 pays a buck and someone making $200,00 pays $10. Neither has gone broke; when it comes to staples – the basic necessities of life – both have the same purchasing power.

Eh, never mind. I just realized why that doesn’t work – stores would try harder than ever to ensure that the only customers they get are the rich ones.

“No Shirt No Shoes No Diamond Encrusted Cane No Service.”

And don’t be like, “Because that wouldn’t be fair.� I mean seriously, according to principle.

I don’t have to cite fairness. The basic reason is that it might backfire on you, but also, the market corrects for that. Meaning: Once a customer finds out you’re charging different prices for different customers, he or she finds a way to become the ideal customer. See the section on airline pricing in the linked article particularly.

(Incidentally, I hereby denounce and/or apologize for all the bad videos my stupid slacker boyfriend has spammed you with [but especially the Mae West/Alice Cooper number, because that was just wrong]. Almost as wrong as you, Frenka.)

“the companies that currently track consumer purchases were also to have an index that set certain prices at the cash register according to how much you spend.”

I think the libertarian response would be:

If the purchase tracking and price setting were done by a private company and everybody knew about it and frequented stores with such a policy by their own free will then it’s not a problem. But, in the real world, this would motivate people to open stores that didn’t operate that way (rich people! shop here! we don’t charge you more!).
No government should set up or enforce such a system because that would be government interference in the economy and that would be bad.

Ah! Finland!.

I’m somehow reminded of Anatole France’s remark: “The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”

Well, that’s not exactly what I mean. Imagine for instance that the companies that currently track consumer purchases were also to have an index that set certain prices at the cash register according to how much you spend. Because the more money you have, the less each dollar is worth, you see — and the more you’ll pay for necessities.

In some ways, rich people *do* pay more for basic items- ever go to a yuppie food store? You’ll see what I’m talking about.

But otherwise, I think this should answer your question:

Price discrimination exists when sales of identical goods or services are transacted at different prices from the same provider. In a theoretical market with perfect information, no transaction costs and a prohibition on secondary exchange (or re-selling) to prevent arbitrage, price discrimination can only be a feature of monopoly markets. Otherwise, the moment the seller tries to sell the same good at different prices, the buyer at the lower price can arbitrage by selling to the consumer buying at the higher price but with a tiny discount.

For example, I own a grocery store. The price tag on my bread says “.00005%â€?; someone making $20,000 pays a buck and someone making $200,00 pays $10. Neither has gone broke; when it comes to staples – the basic necessities of life – both have the same purchasing power.

Because someone would always be willing to sell that item to the rich guy at a lower price, since the rich guy could purchase more of item x and guarantee more revenue for the rival seller.

A better question for libertarians might be: “How do you think your make-believe magical “free-market” fantasy world will replace the real world we actually live in?”

This question goes for conservatives too, I suppose.

Otherwise, the moment the seller tries to sell the same good at different prices, the buyer at the lower price can arbitrage by selling to the consumer buying at the higher price but with a tiny discount.

Okay, this is one reason why economic theory so easily falls into zaniness.

Scenario: You buy some loaves of bread at the supermarket and then stand outside waiting for rich guys to come up and buy them from you for a tiny profit.

Some people would probably do that (similar to the orange vendors in LA), but would there be enough bread arbitrage to totally even out the price discrepency?

That’s a lot of people standing around waving loaves of bread. …And then you need peanut butter, and a selection of different kinds of jelly. And tomatoes and baking soda, and pretty soon you realize that the whole supermarket would have to also be on sale in the parking lot.

Doesn’t happen in real life. People can’t be bothered.

Because someone would always be willing to sell that item to the rich guy at a lower price, since the rich guy could purchase more of item x and guarantee more revenue for the rival seller.

Not if the higher price (vs. quantity purchased) was the better deal for the merchant. You see what I’m getting at?

That’s a lot of people standing around waving loaves of bread. …And then you need peanut butter, and a selection of different kinds of jelly. And tomatoes and baking soda, and pretty soon you realize that the whole supermarket would have to also be on sale in the parking lot.

Doesn’t happen in real life. People can’t be bothered.

Well, that’s what would happen in real life if grocery stores price discriminated based on income. Unless you ban people from reselling goods they bought cheaply, they would certainly sell those goods back to rich people at a higher price than they paid for them. And they wouldn’t need to sell outside the grocery store- they’d open up their own store where they could sell discounted groceries to rich people.

Not if the higher price (vs. quantity purchased) was the better deal for the merchant. You see what I’m getting at?

Ah, well now we’re getting into elasticity! That’s a whole different story. But basically it goes like this:

When prices are inelastic, you can generate more revenue by jacking up the prices. This is because the increase in price will not heavily impact the number of consumers who buy your good.

However, prices are always more elastic in the long-run. When prices are elastic, you can generate more revenue by lowering the price. Think about the oil embargo in the ’70s:

-OPEC decided to limit the supply of oil to rich Western countries, thus jacking up the price and making OPEC a shitload of money

-Over the long haul, rich Western countries reduced their consumption, found alternatives to oil (especially nuclear power in Europe), or found more domestic drilling sources.

-Thus, it became less profitable for OPEC to keep charging higher prices to rich countries, and the embargo collapsed.

The same would happen if you had a bunch of grocery stores who decided to price discriminate against rich people (which would be colluding and would essentially be illegal anyway).

Damn, what a bunch of fucking nerds.

Damn, what a bunch of fucking nerds.

Eat it, cobag. You read every damn message on this thread and you know it.

Now leave me alone, I’m trying to pick out my new Cylon body…

Of course, if you do enough arbitrage in the parking lot, you become rich yourself, and can no longer buy the groceries cheaply…

Why wouldn’t the prices be higher for Buyer Y than for Buyer X?

No reason at all. In fact, as you mention, consumer-different iated pricing already happens, despite the heinous intrusion of liberty-hating regulators into the economy. Consumers might get pissed off by the practice and take their business elsewhere if they knew about it, but as they usually won’t have the relevant information at hand (unless it’s been uploaded into their brain’s implanted cybernetic onboard realtime price index), sellers will usually get away with it.

Consumers might get pissed off by the practice and take their business elsewhere if they knew about it, but as they usually won’t have the relevant information at hand (unless it’s been uploaded into their brain’s implanted cybernetic onboard realtime price index), sellers will usually get away with it.

Yeah, that’s certainly a good point. On a broader level, people can charge more money for goods in wealthy areas- it costs a bunch more to buy a bottle of Coke in Manhattan than it does in Arkansas, for instance.

Imperfect information will always muddle up economic theories. This is why perfectly competitive markets don’t really exist anywhere.

The same would happen if you had a bunch of grocery stores who decided to price discriminate against rich people (which would be colluding and would essentially be illegal anyway).

What is this “illegal” you speak of? It sounds like some tyranical imposition of the thankfully-dead state to limit the economic freedom of the marketplace!

(Unless, of course, you mean that Rich Perso- erm, Morally Advantaged Market Actor X’s personal “police force” are going to burn your store down if you try to charge them like that…)

Gavin, I don’t get the question—-Customer Y would pay more than Customer X.

You have two competing forces here—the first is the urge of the venders to capture more profit by price discrimination (i.e., things that offer lower prices to those who wouldn’t otherwise buy any of the good, but enforce higher prices to those who would—like senior citizen rates at the movies etc.), and the second is the urge of the Customer X’s of the world to capture some of the same profit by arbitraging the market—purchasing at the lower Customer X rate and reselling to Customer Y at slightly less than the normal Customer Y rate. So the venders would lower the Y prices to close to the X prices—but in the absence of a perfectly frictionless arbitrage market they wouldn’t be exactly equal.

I can tell none of you hail from East Oakland.

Buery X heads to the liquor store at 78th Avenue and International Boulevard (the former E. 14th Street) and pays almost twice what he would have paid had he been in Montclair (Oakland’s affluent hills district) at the Safeway.

Of course, the Safeway would probably have given him a raincheck on the Fleshlight.

Because that would mean the end of t3h capitalism!!1

You think rich people (who, as we’re told, rule the world) would go for a plan that puts them on the same level as the unwashed rabble? The whole reason they GOT rich was so they could have a vastly unnecessary amount of money. In fact, with this system in place, why would you even WANT more money?

Despite all the psych studies proving that once people’s needs are cared for, they don’t need any more money to be happy, people still believe having a 1073-acre mansion/ranch will make them forget their small penises.

“Doesn’t happen in real life. People can’t be bothered.”

Like the mob can’t be bothered to hijack a load of cigarettes and sell them on the street? Oh, wait, that happens all the time. I had a crackhead try and sell me a used set of hairclippers. Some people will hustle like hell for the $$$$.

Considering that rich kids now pay a fortune for pre-torn up jeans and shirts that don’t fit, I figure you can sell rich folks anything for a huge price if you make it look trashy enough to be trendy.

Y’know, for exhibinistic webcam operators of a male persuasion, there exists a completely transparent Fleshlight. It certainly allows for… interesting displays. Ahem.

Personally I ALWAYS use a sliding scale on what I charge people! Although it’s more tied to how much of a pain in the ass the person is then their bank account size.

i don’t understand how this is a libertarian question. It seems to me just a simple economics question. If the rich buyer is willing to pay more for those products and he doesn’t try to search for the best price then he would pay more. But just because someone how is rich doesn’t mean he is willing to pay more. He probably wants to use his wealth to buy more not pay more for the same amount as the poor person. This is the same for the poor person as he gets richer I doubt that he would be willing to pay more for the same products but would rather use his wealth to increase his standard of living.

On the question of why the prices are not different I would argue that the rich person is no different than you or I. He would look for bargains and demand the lowest price as would I.

Because the more money you have, the less each dollar is worth

I think you are mistaking the fact that the more supply of money there is the less each dollar is worth.

This is different than the more money you have the less its worth to you. I would bet that many rich people are very cheap. They spend what they need to and nothing more. Yes they might have a bigger house or a nicer car but from the rich that I know the price of there car relative to their income is far less then most middle class people. ie If you make $500,000 a year and drive a $100,000 car thats the same as a 50K driving a 10K car.