Archive for February 2nd, 2011

The Price of Everything. Solving the mystery of why we pay what we do. Eduardo Porter

The Price of Everything. Solving the mystery of why we pay what we do. Eduardo Porter.  2011. ISBN 9781591843627.

I am burning through every resource on pricing I can find.  The author is a New York Times journalist – and I do so love to read books by journalists.  They can write clearly, succinctly and well!  This book is an incredible journey through business, anthropology  and psychology. Some snippets.

  • Market transactions do not necessarily provide people with what they want; they provide people with what they think they want. Consumers often have the most tenuous grasp of why they pay what they do for a given object of their desire. (This guy must drive economists crazy!)
  • Value started as a moral inquiry, a manifestation  of divine justice (back when the Church ran the World)
  • The real world is plagued with search costs. It is difficult for consumers to to find out what a given product costs in all the shops in town- let alone everything available on the Internet. One of the best known market techniques is to make it difficult for customers to understand where they can get best value for their money
  • People value more things they bought than what they receive as gifts
  • Imposing a fine on tardy parents picking up their kids at daycare worsened tardiness.  The fine made it affordable and removed the guilt.
  • Even if an investor were to correctly call a bubble, it would be expensive to bet against it
    With enough investor enthusiasm, the bubble will stay inflated longer than the contrarian could remain solvent.
  • Keynes believed that most investors really do not know what they are doing.  Sort of betting on the
    average response to average events. Keynes made a lot of money in the market.
  • Expect increased right wing politics as the economy worsens

The author covers off the price of slaves, women, children, global warming, religious affiliation, horsemeat .  It is an eclectic and marvelous journey. Great book for a trip.

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