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Assorted links
1. The latest in resale price maintenance
2. Paul Krugman's (unfinished) reading list for international
3. New physics blog, via Razib
4. Lengthy article on Bob Barr
5. The cost of getting ready
Posted by Tyler Cowen on August 19, 2008 at 11:22 AM in Web/Tech | Permalink
Comments
The secondary costs and benefits of getting ready for the wingwoman who takes about 20 minutes to get ready:
While waiting for my friends to finish primping, I watch TV, make dumb comments on econoblogs and drink a lot of beer in the process. By the time we actually leave the house, I've wasted a couple hours, but also end up saving money because I'm sauced enough that I only have a few when we get where we're going.
Posted by: your mom at Aug 19, 2008 11:38:53 AM
The resale price maintenance business is so interesting because the supplier in each case obviously could increase the price that they charge retailers. Everyone agrees that that would be possible, but they don't. They could even charge the discount houses that tend to charge "too low" a price more than the other retailers, to ensure that things even out to their liking.
The question is why do the suppliers choose such a seemingly odd strategy of demanding that the retailers charge more, not obtaining any more of that extra cost? I've yet to hear a better explanation than the one of discouraging associations with cheap bargain sites, and of wanting to discourage the free-riding that comes with, e.g., going to the nice local full-service dealer to get a demonstration and then buying it for less over the Internet.
Posted by: John Thacker at Aug 19, 2008 12:27:37 PM
Reading the article about "resale price maintenance" made me queasy. It reminds me in so many ways of the Wickard V. Filburn Supreme Court case, arguably one of the worst and most logic-free decisions they've ever made.
My favorite quote from the article: "The high court's June 2007 decision, written by Justice Anthony Kennedy, declared that minimum-pricing pacts between manufacturers and retailers could benefit customers under certain circumstances. For instance, the pacts could foster competition by giving retailers enough profit to promote a brand or offer better service, Justice Kennedy wrote."
What kind of twisted logic is that? Consumers benefit from higher prices because retailers can advertise more? In what kind of backwards world am I better off for paying more for a given product? And how did this person get on the bench to rule on this case in the first place?
Posted by: ben at Aug 19, 2008 12:32:40 PM
So Bob Barr likes Pink Floyd? Then here is a possible campaign song. Most of you
probably know how the music goes
"We don't need no regulations"
"We don't need no price controls"
"No socialism in the court room."
"Hey, Congress, leave us all alone"
Posted by: Cyril Morong at Aug 19, 2008 1:24:13 PM
Another take on getting ready -- http://www.youtube.com/watch?v=Y9NgXIkyiwk
Posted by: Jim at Aug 19, 2008 3:45:55 PM
Another take on getting ready -- http://www.youtube.com/watch?v=Y9NgXIkyiwk
Posted by: Jim at Aug 19, 2008 3:46:07 PM
John: Setting a minimum price forces retailers to compete on margins other than price - like quality of service. It may be a reaction to the problem of free-riding that you mentioned.
I believe Alchian discussed this, but I can't remember the article.
Posted by: Pedro Bento at Aug 20, 2008 12:05:31 AM
