So, for some of my life I've been in business to business sales. And what happens in a negotiated business transaction is this: the seller tries to sell for the highest possible price, and the buyer tries to buy for the lowest possible price. And both try to deceive each other; the seller about the cost to supply or manufacture, and the buyer about the value of the product or service to them. And so they haggle, telling each other outright lies and dubious half-truths, each doing their very utmost to deceive the other.
And this is the way the free market works, business to business, professional to professional.
I dread to think on the extent to which non-professional consumers are misled by professional suppliers.
Does anyone else spot the moral concern, here?
Maybe, if the seller were honest about the cost, and the buyer honest about the value, a deal could be struck midway between the two, without the necessity for lies and deceit.
Just thinking aloud. I make no apologies for my naivity.
Best wishes, Strivax.
People need to read less neoclassical economics and more economic anthropology. A really good book is
Economies and Cultures: Foundations of Economic Anthropology, by Richard Wilk. The 2007 edition appears to be the latest. I read an earlier edition. If the former is like the latter, a reader will see that there is anthropological evidence that the behavior you describe is nothing more than a learned cultural act (like eating with a fork and knife; playing baseball; taking a test at school; etc.). Among that evidence is the fact that anthropologists have observed cultures where every economic transaction is an even exchange--they may even go as far as saying that people in those cultures have no concept of profit.
Some of us have not been enculturated/socialized into the behavior patterns that you describe. I pay very little attention to price. The behavior you describe makes it sound like consumers consciously, deliberately try to get as much as they can for
as low a price as they can. I do not doubt that some--if not a lot of--people have been socialized to behave that way and that they are very good cultural actors when they do it. But it is possible to be motivated by economic profit rather than pure accounting profit. In an accounting profit sense, if you shop around and compare offers you might profit by finding the exact same car and warranty at the lowest price available. But in an economic profit sense the value of the time and energy spent doing all of that shopping, comparing, and negotiating could exceed the value of the money saved by paying the lowest price available. I am only concerned about finding products/services that I like at
a price that I can afford. Nine times out of ten I can afford
every different price. I don't then spend time and energy trying to shop around, negotiate, etc. until I get the lowest possible price. I only do the latter when I can't afford every price, like when I was shopping for a new apartment several months ago.
Price is not a reliable measure of value anyway. Externalities such as damage to ecosystems, pollution, cultures being destroyed, etc. are almost never included in the price of a good/service.
It is all a cultural act. Deception may be a small part of it sometimes. But it is mostly people making transactions by playing roles that they have learned within a game that they have learned to play. It happens in all kinds of social interactions, not just the ones that economists measure. Men and women who are looking for marriage partners do not put a numerical price on what they are offering and then shop for, compare, negotiate, etc. that number. Most people do not think that dating rituals are people deliberately trying to deceive each other, so why would we think that rituals like selling and shopping for a pair of shoes are inherently deceptive?
It would not surprise me to find that psychologists and sociologists studying behavior in markets in industrialized societies have found that price is only one small variable--and one of the least influential--in the behavior that we classify as economic behavior. Things like tradition, peer pressure, brand loyalty, professional reputation, public relations, etc. probably influence the behavior of producers and consumers more than prices do.
