There have been a few discussions recently on the topic of disclosure of prices. Rather than derail the other threads, I decided to start a new one.
One reason people do not disclose prices is because they are selling a story, not as much the product. I am a fan of a podcast called Planet Money. They had a great story about how and why Jewelers (and many other goods) hide the price. The price is to sell you the story. That is the premium for the seller. You could apply this to many other premium goods including cheeses that have to be made in a certain location in the world.
http://www.npr.org/sections/money/2014/09/22/349873785/why-jewelry-stores-hide-the-price-tags
Also there is another reason of trying to get the maximum price of what you think each individual will pay. There is a great breakdown of the history of this here:
http://www.npr.org/sections/money/2...sode-633-the-birth-and-death-of-the-price-tag
A basic premise of the story is how the history of prices pre-industrial revolution were based on the maximum amount that the seller perceived of the buyers demand.
It is interesting how culturally westerners hold a price. Post industrialization westerners discovered it was more economically efficient in most transactions to have a standard price. I have lamented about the frustrations of the cultural differences in transactions in Indonesia when sellers charge a bule price or simply state something very high expecting it to be negotiated down. Occasionally when it is a small amount, I will just pay more. My time is more valuable to me than the negotiation. Many times the cultural difference between perceptions of price will have me just walk away from the transaction resulting in an economic loss for both parties (wasted time and no exchange of money).
This topic has been on my mind for a couple years so I thought I would write it down and listen to what others have to say on it.
I have a few questions I would enjoy peoples opinions on:
Do you think standardized pricing will culturally develop in Indonesia as the economy and wages develop?
Do you think that the cultural value of bargaining could a very minor impediment to economic development?
Will the widespread use of smartphones in Indonesia have them skip standardized pricing for a more adaptive model?
Any other thoughts I would appreciate.
One reason people do not disclose prices is because they are selling a story, not as much the product. I am a fan of a podcast called Planet Money. They had a great story about how and why Jewelers (and many other goods) hide the price. The price is to sell you the story. That is the premium for the seller. You could apply this to many other premium goods including cheeses that have to be made in a certain location in the world.
http://www.npr.org/sections/money/2014/09/22/349873785/why-jewelry-stores-hide-the-price-tags
Also there is another reason of trying to get the maximum price of what you think each individual will pay. There is a great breakdown of the history of this here:
http://www.npr.org/sections/money/2...sode-633-the-birth-and-death-of-the-price-tag
A basic premise of the story is how the history of prices pre-industrial revolution were based on the maximum amount that the seller perceived of the buyers demand.
It is interesting how culturally westerners hold a price. Post industrialization westerners discovered it was more economically efficient in most transactions to have a standard price. I have lamented about the frustrations of the cultural differences in transactions in Indonesia when sellers charge a bule price or simply state something very high expecting it to be negotiated down. Occasionally when it is a small amount, I will just pay more. My time is more valuable to me than the negotiation. Many times the cultural difference between perceptions of price will have me just walk away from the transaction resulting in an economic loss for both parties (wasted time and no exchange of money).
This topic has been on my mind for a couple years so I thought I would write it down and listen to what others have to say on it.
I have a few questions I would enjoy peoples opinions on:
Do you think standardized pricing will culturally develop in Indonesia as the economy and wages develop?
Do you think that the cultural value of bargaining could a very minor impediment to economic development?
Will the widespread use of smartphones in Indonesia have them skip standardized pricing for a more adaptive model?
Any other thoughts I would appreciate.
