Supply, Demand, Chips
 

> I disagree with this point. I know you all
> know I disagree with it, but I thought I'd
> try to illustrate why I think competition
> has a big impact on pricing.

> Let's suppose I'm in the business of selling
> CD players. And so are 14,000 other people.
> There is heavy competition. The product I
> sell does not differ from any one of my
> competitors.

You are thus selling a commodity. Commodities only selling point is price. Because... much supply (supply and demand again).

> While your experience may suggest that
> statement is true, I'd be surprised if it's
> true in all cases. I would say in most cases
> people prefer to pay less for the same thing
> than more. Anyone who has been around
> compulsive discount shoppers will be aware
> of this.

And likewise... anyone who has been around "label" shoppers will also tell you otherwise - as these people LOVE spending money on designer label stuff and the more pricey the better.

Fun this picking singling out, isn't it?

> Sure, there are examples where price may
> increase demand -- luxury goods
> specifically, or goods where the value might
> not be apparent or obvious to the buyer --
> but I'd say for most goods this isn't the
> case.

> Prices in the stockmarket are set primarily
> by competition amongst stock analysts and
> fund managers trying to buy good companies.
> It's very difficult to beat the market
> because it is efficient. It's efficient
> because of that competition.

What you are calling competition to buy is DEMAND.

> Another way to look at it is to say that
> competition increases supply which pushes
> down prices. If there was no competition,
> and a monopoly retailer you could
> artificially constrain supply, or in other
> words increase prices.

So there. You have argued yourself back to the point of supply and demand.

> The reason I keep mention cost reductions is
> because I think it's integral to the reality
> of the situation.

No-one is disagreeing with cost reductions. The disagreement is in the passing on of those reductions.

> You mentioned that prices don't instantly
> fall. This is probably true. But over time
> prices are probably lower than they
> otherwise would have been.

Okay. Quick survey.... everyone who has a family to support... please raise your hand IF you have found that prices have been coming down?

Sorry... if you think prices are PROBABLY lower than they otherwise would have been due to technology changes which have enabled the selling business to reduce cost.

> Having said that, I think it's fair to say
> that the technology at the counter does,
> over time, reduce the end cost to the
> consumer.

Again. Please raise your hand if you have seen prices come down over time.

> In my example I wouldn't give permission to
> someone that happens to be working in that
> bank or school either. I don't see a big
> difference.

The difference is... when you give your details to a bank you do so willingly. When your details are taken from a chip or whatnot, it is done without your permission. See the difference now? One is WITH your permission and the other is WITHOUT your permission.

> I'm not trying to say people should support
> these chips. All I'm saying is that there
> might be some benefit to them that instantly
> dismissing them will overlook.

The benefits you have mentioned can all be had without ID Tags.

> Also, I'm not really sure why my talk of
> potential cost cutting is dismissed as
> fantasy whereas mythical scanners that look
> at your boot or bin and instantly tell you
> what's there is closer to reality. :)

Again, no-one is disagreeing that these tags will not cut costs. The disagreement is that items will be cheaper for the consumer.

Let me give you just one example of tremendous use of technology to improve efficiency and cut costs and how it has resulted for the consumer...

BANKS!

Every year there are more and more technologies put in place to remove person to person interaction and speed everything up. Every year bank fees go up and banks make NEW RECORD PROFITS - and then complain they need to raise rates again to stay profitable.

My bank recently raised their merchant participation fee from $8 per month to $22 per month. Why? And I quote what was told to me... "To bring the prices more in line with what other banks charge."

As for the chip reader you claim is fantasy... the chips are designed to be read. That is their purpose. Thus a reader able to read these chips is not fanatasy.

Michael Ross