Comment by xoa | Hacker News Reader

Comment by xoa | Hacker News Reader

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No. The Free Market is a specific distributed economic value apportionment tool, and like any tool it has requirements to operate efficiently, failure modes, and no inherent "goals". Amongst the key foundational requirements is Information Symmetry: in an ideal Free Market exchange, participants all have access to full & identical information. The more asymmetrical the information, the less efficient the exchange will be until you see full market failure.

Now yes, in the real world there are certainly man areas where it can get complex (such as processing ability). But for a party that claims to champion the Free Market, things like information symmetry and cost internalization should be core goals. Information symmetry in particular is low hanging fruit, it should be both utterly uncontroversial and straight forward for businesses to implement as obviously they're keeping track of all of it internally anyway. It is explicitly and incontrovertibly anti-Free Market to support efforts to hide pricing information from any party to a transaction, full stop.

It is a shame that the Republicans have so often been opposed to the Free Market in their actual actions and policies, whatever words they choose to say, given that the Democrats are also not all-weather friends to it. It's a very powerful tool that could be used for a lot more good then it is. I guess it doesn't help though that so few people in the general population have any idea what it actually is. The name probably doesn't help either: "Free" and "Market" are two of the most overloaded words in the English language, and the name might encourage people to imagine they know what it is through "common sense" in a way they wouldn't about something like quantum chromodynamics. Economics (along with probability and statistics) is sorely under taught in most public education curriculums I've read, despite being key to modern life.

If you buy directly from the airline, it shows bag fees. If you are buying through a third party website, you can easily look up the airline's website and see the domestic and international baggage policies and fees before you buy. If you are ever confused, you can call the free customer support. Why is specific regulation forcing information to be presented a certain way necessary?

> Why is specific regulation forcing information to be presented a certain way necessary?

Because it never happens like you imagine it.

https://www.cbsnews.com/news/govt-airlines-should-disclose-b...

> Currently, airlines are only required to disclose bag fees, and even then they don't have to provide an exact price. Some airlines provide a range of possible fees in sometimes complex charts.

> Many consumers are unable to determine the true cost of a ticket because fees are often hard to find or decipher, the government says.

> More recently, some airlines have begun offering consumers not only a stripped-down "base" airfare, but also a choice of several packages with some of the once-free services added back into the cost of a ticket, but at higher prices. With packages and a la carte fees multiplying, comparison shopping for airfares is becoming more difficult, consumer advocates say.

Which of this is good?

The free market and capitalism are different concepts.

And capitalism is based on a free market.

Those who are opposed to regulation generally cite regulation as being in opposition to the free market.

Yea, I know the ideology. I was criticizing it. It's foolish to believe that under conditions of regulatory capture, which is incentivised by capitalism and made possible by gross inequality putting power into few hands, that capitalists will do anything other that accrue capital at all costs.

I have never ever heard of information symmetry being required for either the free market or capitalism.

I can't even find much on the subject compared to information asymmetry.

https://en.wikipedia.org/wiki/Information_asymmetry

I mean, the Wikipedia article you linked about information asymmetry characterizes it as a cause of market problems and inefficiencies, including adverse selection ("The Market for Lemons"). To say that you need information symmetry for the market to work well is just another way of saying the same thing - at least in the kinds of situations described.

The absence of information symmetry is one of the causes of what economists call 'market failure'.

Here is an example frequently used in introductory microeconomics courses: https://en.m.wikipedia.org/wiki/The_Market_for_Lemons

In this example, information symmetry would be better for the majority of market participants, and no worse for the remainder.

So you theorize that all airlines will implement completely random fees for baggage so no one has any idea what a flight will really cost...

It seems that at best there will be a small amount of information asymmetry and that should the randomness of bag prices get too bad, someone will be incentivized by the market to publish bag prices.

At worst, it will lead to something like GasBuddy where consumers input what flight they took and how much the bag cost.

The idea that the market for airlines will completely break down because there is no regulation on bag fees seems a little... far fetched.

You're arguing against a bunch of things I didn't say. I didn't say even a single word about the 'market for airlines' (or about the market for air travel).

My comment was a direct response to the parent comment, which claimed information symmetry isn't cited as a requirement for functioning markets.

That particular statement is untrue, so I replied.

It isn't required.

A lot of the value in things like the stock market is to disseminate the various information asymmetries in the form of price.

There's a reason guys like Paul Krugman write books on economics rather than trade the market.

I'm glad you brought up the stock market. Insider trading laws exist in the US and most developed countries, precisely because information symmetry is important to the functioning of equities markets.

EDIT: Don't take my word for it. Look at the SEC web site's description of their purpose. Excerpt (emphasis mine): "To achieve this, the SEC requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions."

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