Unethical vs. “unethical”?

None of the funky clothing or art is priced, either. Mata says she knows it's "unethical," but she sizes people up and names a price that she thinks fits the client.

The link is here and I thank Jeremy Shown (rhymes with clown) for the pointer.

Comments

Third degree price discrimination, a rare and beautiful creature.

This is why it pays to avoid wearing a suit or expensive clothing of any sort when shopping for pricey items such as electric guitars, furniture, televisions, bicycles.

Mislead the price-discriminator about your willingness (and ability) to spend by changing into jeans and a t-shirt before hitting the shops after work or at lunch time, that way you're in a better position to negotiate down the price of the item with the seller.

Best to dress like a student if possible.

Best to dress like a student if possible.

Good sales people are rarely fooled by this. At an auto dealer, experienced sales people will tell you that you can not tell from the way people dress who will pay cash.

Many millionaires (well, maybe they're not millionaires any longer) do not live in opulent houses or dress in expensive designer clothes or drive luxury cars. Think dry cleaners and people who have owned busy pizza places for a long time.

I know a boutique owner who's done a variation of this for years. He woos the customer and palms the price tag. He usually ends up getting 20-25% more for it than the price listed on the hang tag -and makes the customer feel like he's doing her a favor.

Ron: worth *to whom*? I may value, for example, a delicious burrito from Chipotle at $12, but I only pay $6.50. Am I unethical? Should I tell the cashier that I'd be willing to pay more?

is it not unethical to pay less than what you consider something is worth?

What does this even mean?

I have no clue what "unethical" means in this context. Do you mean illegal? Immoral? If the latter, what code are you using? By what "code" or philosophy do you judge something "unethical"?

this sort of thing would NEVER happen online, say, where a retailer might potentially know what you have paid for before

babar, you are funny (not as funny as Andrew, however).

Amazon does this. Usually not by charging more, but by giving discounts to a few. Don't know if this still works on Amazon, but it used to: log in and look at an item you want to buy. Come back 12 to 36 hours later, log in and look at the item again. Is a lower price offered?

Where's the ethical question? The offer is not made until she says the price. Then the customer can choose to buy, or not buy, at that price. Or can haggle to reduce the price. But she has a right to ask any price she wishes, and they have a right to pay any price they believe the item is worth.

Should she attempt to charge customers who look Jewish more?

There is nothing unethical about the pricing approach. You may not want to do business in that manner, but there is not an ethical issue in play in the least. If you feel that this business practice is unethical, you need to spend more time in the real world.

It's unethical because she is taking advantage of her customers' lack of perfect market knowledge/information. She is essientally tricking (or attempting to trick) her customers into paying more than an item is worth.

"It's unethical because she is taking advantage of her customers' lack of perfect market knowledge/information. She is essientally tricking (or attempting to trick) her customers into paying more than an item is worth." - Scotch Hamilton

Carefully consider your assumptions here: that an item is objectively "worth" something, which is based upon a market in which consumers have "perfect market knowledge" and therefore the prices perfectly reflects preferences. It is a highly neoclassical account of an imaginary world.

Is this where we found our morality? What if we did base our ethics upon such a foundation--what if merchants were not allowed to charge anything but a "perfectly competitive" price? Where would cost innovation come from--how could prices ever fall? What would inspire new innovation?

In any case, when I go to local markets or garage sales and the seller has no set idea what the price should be, and we haggle a bit or I make an offer, I do not feel that something unethical is being done: we are agreeing upon a price, just between the two of us. This is the same as when you and a friend haggle over what she can offer you for those two Bruce Springsteen tickets. It is also what this lady is doing in her store.

Think of this as well: if it is not unethical to offer a discount to a customer because she is elderly, why would it be unethical to charge different prices to different customers based on their characteristics or willingness to pay? Should we get rid of senior citizen discounts too? Also, the Soviet Union used price discrimination widely to reduce income inequality--would you have seen that as unethical too?

Now, it’s fair to say "let the buyer beware" and "do your homework before you buy" but at the same time I find it hard to think that if you have a sense of ethics that you wouldn’t agree that the dealer took advantage of his customer.

AI yi yi yi yi.

If I go to a garage or yard sale and see something that I know I can sell easily for $1000 on eBay, and the seller is asking $5, do I have an obligation to let the seller know that?

Why?

What if the item can be sold easily on eBay for $25? What if I have a buyer for $10,000?

What if the family holding the garage sale is newly destitute and they are being kicked out of their house and both parents have lost their jobs?

And does your answer change if you know that both parents were formerly blue collar workers at the local RV factory making $25 per hour? $100 per hour? $10 per hour?

What if they lost all their money because they were house flippers who got caught holding the last houses when the market collapsed?

What if they were former hedge fund managers who lost all their money with Bernie Madoff?

Spare me your "ethics" and talk about law and moral codes. Don't hide behind "ethics". It doesn't mean anything.

Once when I was selling industrial materials, a guy came in with something he'd picked up at a Navy surplus sale. He wanted to swap it for $50 worth of another material, which probably cost us $30. We agreed and he was happy.
Later that day, it happened that someone called us looking for that type of material and hadn't been able to find any. I told him I couldn't provide mfr's lot numbers or certs but it was the right material, and that'll be $5000. He was delighted to pay that, and I was only charging the usual catalog price.
Was that unethical?
(My opinion is "no"--we added value by the knowledge of what the material was and the reputation for having weird stuff like that in stock, and I didn't charge the second guy more than he could have paid elsewhere).

anon, of course if you think that ethics and morals mean nothing then you're not going to have an ethical or moral problem with any practice.

And for the record, I do think that if you come across an item at a yard sale that is priced at $5 that you know actually has a market value of $1,000, then yes, you do have a ethical obligation to inform the seller. The Golden Rule, which is the foundation of all morality, demands it.

“In Scotch's example above, if the expert appraises the value at $1,000 and the dealer promptly sells it for $5,000; it appears that the expert was quite wrong in his valuation.†

Not necessarily – the point of an appraisal is to determine the market value (which assumes that the people in the market have good knowledge of what others would pay for it as well) of something, not “how much could you possibly sell this to somebody who is really clueless††¦

Look at it this way: I could sell somebody a $1 bill for $5. That does not mean that his $1 bill is now worth $5. It means that I just had $4 of unearned wealth transferred to me. And if I accomplished this by trickery or taking advantage of his lack of understanding of the worth of a $1 bill, then I have committed an ethical violation.

This sounds like a fantastic place to visit and booby trap with stink bombs.

I know it's unethical, but.... .

Ahem, the writeup gives as examples of items being sold at this place a "syringe-studded dartboard or recycled chandelier." One can agree that price discrimination for some goods and services is unethical without being too bothered by this case.

It's also a mistake to make the ethical argument hinge on divergence from an alleged true price. These aren't commodities. You go into a gallery (or a store full of funky used crap) and what you're paying for, maybe almost entirely, is the owner's taste, the service that the owner has provided in assembling things for you to pick from. Gallery markups reflect that.

ethics and morals
Uh, now you're getting closer to my question.

What is the difference between:
"ethics" and "law"

"ethics" and "morals"

"law" and "morals"

Because much of what has been written here as "ethical" is merely YOUR opinion about what is right or wrong.

This reminds me of all the BS surrounding "business ethics" which is nothing more than an attempt to impose extralegal pro- or prescriptions (well and ill-intentioned) on business that can not be found in the statutes and regulations governing business conduct.

And once you introduce money and voluntary exchange into this conversation, it sounds like the same BS to me.

"Ethical" behavior is usually associated with codes of conduct promulgated by cartels, such as Bar Associations.

And I am not clear at all why if I have some superior information about the value of an item I am obliged to tell the person with inferior information.

And why is it a problem if someone wants to pay millions of dollars for paint on canvas or sculpted stone or ink on paper or some item of clothing that I wouldn't want for free?

As Louis Carabini said:
"There are those inclined to liberty--freedom of the individual to live his life or her life in any peaceful way. And there are those who are inclined to mastery--permitting others to live their lives only as another sees fit."

"And I am not clear at all why if I have some superior information about the value of an item I am obliged to tell the person with inferior information."

I find it interesting how readily some posters are willing to overlook the true value of information. If the seller had a price dispensing machine that cost $4000 to operate, nobody here would dispute a $4000 markup on an unpriced item. Yet as soon as the costs become intangible items such as experience, education and time they are discounted nearly entirely.

The buyer is paying $1000 for the item and $4000 to avoid acquiring the knowledge that the seller has acquired. Buyers who have lower opportunity costs will be more likely to shop around or get an expert to appraise the item for themselves. There is no ethical issue here provided the seller is honest and does not misrepresent the appraised value of the item.

She's a Marxist, right? "From each according to his ability...."

(I'm mostly kidding.)

for example a guy selling bottled water for $50 a gallon to a man dying of dehydration...

Buuuzzzzt. Wrong again. Why is it "unethical"?

Get off your "ethical" high horse and explain why you believe it is wrong.

Please stop hiding behind "ethics" as if everyone agrees, or should agree, with you.

You're starting to remind me of the idiots who once they toss a "racist" label on someone that automatically makes it so.

Your use of "ethics" is intellectually lazy, sir.

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