Subject: Re: anti/Law (an attempted explaination)...
From: "Karsten M. Self" <kmself@ix.netcom.com>
Date: Mon, 12 Apr 1999 09:51:01 +0000

"Stephen J. Turnbull" wrote:
> 
> >>>>> "kms" == Karsten M Self <kmself@ix.netcom.com> writes:

>     kms> "Stephen J. Turnbull" wrote:

> I have no idea what your point is.  

Don't press me to far on that either <g>

> Of course I mention price
> discrimination.  And my example was just that, an example to show
> possibility.  The fact that SAS manages finer price discrimination


We're on the same page, mostly.  I've got an undergraduate's
understanding of econ, plus some personal interest which takes me a bit
further.  I wasn't sure where you were at on the price discrimination
debate.  Yes, there's a consumer surplus, and yes, the skillful marketer
can claim more of it for herself.
 

>     kms> Arguing that a product has a minimum market price (below
>     kms> which it will not be produced), set by its production
>     kms> function, is clearly valid.  I suspect this had something to
>     kms> do with the 'cost plus' thread on the mailing list previously
> 
> Your conjecture is wrong.  That thread was purely and simply about
> "just pricing" under conditions of uncertainty about return, despite
> the tag attached to it.  Cf. Thomas Aquinas, et al.  Cost-plus was
> simply the most familiar of the mechanisms that would more or less
> achieve Brian's goals.

<bit on lawyers' billing practices snipped>

Thanks.  I was hoping for a capsule summary that didn't have too much
cyanide in it.  The thread wasn't about what I was hoping it was about
then -- the bits I did get through didn't seem to go far (and took
forever to get there).  Brian's ever-nending question for social equity
continues....
 

>     kms> Evian <=> naivE
<...> 
>     kms> substitutes.  The hostess with the mostest will bore you to
>     kms> tears with an alternative interpretation.
> 
> I couldn't have put it better myself.  Whose side are you on, here?

As I already explained to Michael, Andy brought me in as a hired
antagonist.  Unfortunately, I volunteered, so the pay stinks.

Ok, we're on the same page, as I said before.  Just takes a while to
sort out voices.
 
> Any economist (including the same consultant who told you they're
> substitutes) will tell you that the hostess is, of course, right (and
> flee, leaving you to be bored).  "Substitutability" is not a
> dichotomous property.  Thus this example is completely irrelevant, as
> far as I can see.  What do you have in mind?

If there was a question and anything remotely resembling a point in all
of this, it was that intangible attributes can drive pricing, and that
there are goods for which price seems out of all proportion to actual
utility.  Frankly, I think we were both grabbing at straws for a few
rounds here -- yes these are the facts, but what do they pertain to? 
Your comments a post or two back were responding to Greg's complaints
(?) over NT WS vs. Server pricing.  I offered an example of more extreme
price discrimination.  The fog settled in....

Is there a possible viable market for OSS businesses based on the
principles of hucksterism and PT Barnum?  Probably on the fringe, but
not for the mainstream.  Also conflicts strongly with Greg Nelson's
principles of trust, etc.

If we can boil two threads into one, I think we're on our way to
establishing two ways in which the market does NOT set prices:

 - The market does not set prices on the basis of cost of production.
 - The market does not set prices on the basis of percieved consumer
value.


Rather, the market interprets a number of factors, generally boiled down
to supply and demand.  Costs help define the supply curve, percieved
value helps define the demand curve.  Other factors influence and
mitigate.

...and I didn't even find a good place to insert my story of IBM
mainframe pricing structures and NOPS codes....

-- 
Karsten M. Self (kmself@ix.netcom.com)

    What part of "Gestalt" don't you understand?
    Welchen Teil von "Gestalt" verstehen Sie nicht?

web:       http://www.netcom.com/~kmself
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