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Comment by stronglikedan | Hacker News Reader

Maybe I'm weird, but I feel slightly offended if a vendor is not offering their lowest price to begin with. A lower price from a different vendor doesn't bother me, but knowing that someone else can pay a lower price for the same product from the same vendor just irks me a little. Especially in these times of fierce pricing competition. It just feels disingenuous.

Of course, this is just from this consumer's point of view. I can see the added value to the vendor, but since I'm only a consumer, it is only the consumers' perspective that affects me.

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Well here's the thing, you're both suffering from imperfect information. If the merchant knew exactly how much you're willing to pay (as well as every other customer) and how his competitors would react to the prices he sets, then he could set his prices perfectly. But he doesn't, so he has to build in a margin which includes things like lower-than-expected sales, returns, and the possible changes in prices from competitors. This all combines to make his advertised price higher than one where he knew the future perfectly.

Now the information imbalance in a haggling situation is a bit different. He doesn't have to advertise the price he gives you, and so can worrying less about how his price will influence his competitors, and he knows at exactly what price he will make a sale. Just like with car dealers, if it's late in the month or year he might need to just move inventory and sell at cost. He has more confidence in your behavior so he can use his own operational information more effectively.

If you want to know more I suggest reading up on "Imperfect Information Market Failure." It's a pretty fundamental thing in economics.

The merchandise involved (http://www.amazon.com/makeanoffer) appears to be art and memorabilia, which tends to not have a set value. There's no absolute market price, so there's no sense of an absolute above-market price.

That makes sense. But this quote from the article made me think that they may leave it open as an option for other types of vendors: "and for sellers looking to communicate and negotiate directly with customers in an online marketplace environment just like they do normally in their own physical store or gallery"

> just like they do normally in their own physical store or gallery

> physical store

> Maybe I'm weird, but I feel slightly offended if a vendor is not offering their lowest price to begin with

Just to flip this around, should your boss be offended if they're not paying you the lowest amount you'd be willing to work for?

Yes, if I'm doing the exact same job for thousands of other people who may be paying less.

In my experience they do attempt to pay you the lowest amount you're willing to work for. I managed to negotiation a 43% increase at one point. That tells me they were never paying based on the value I bring. Had I not threatened to leave I would still be making 43% less.

In many situations the actual cost to a vendor does fluctuate over time, but continuously updating prices has costs that outweigh the upside demand and perhaps brand loyalty that comes from transparency. Some example costs include (a) customer frustration from unpredictable prices and (b) consumers deterring purchasing decisions waiting for prices to reach some threshold they are hoping will arrive one day.

I'm certainly in the (b) category. I don't have to have most things right away. I have a list of things that check pricing on frequently, and when the price is right, I buy. Sometimes I never buy because the price never meets the threshold. Of course, that's only for things I desire, and don't necessarily need.

Of course, as morley pointed out in a separate reply, this seems like it may only be limited to art and memorabilia, which tend not to have a set value. If limited to these types of items, then Amazon's approach may make sense.

Try a holiday in India, Nepal or Morocco. Nothing has a set price. Its annoying at first, but after a while you may appreciate that you pay for what you value, not paying based on some price set by someone else.

Or if you're American and want to try it closer to home, buy some tickets from a scalper.

I feel like Steam, although the practice is successful for them, is pushing all consumerism in this direction. I defer all my gaming purchases until they come on sale on Steam. I can't help it, by this point I have been trained to act this way. So much so, that is almost Pavlonian.

I've done price matching with different vendors before (physical stores). Now if my preferred vendor is having it a higher price than another vendor, amazon makes it easier for me to ask for a price match.

Makes sense. Another great use case that I didn't think of.

It makes sense to offer discounts via this kind of thing if the customer needs multiple of something since there are usually a lot of fixed per order costs.

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