This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
3/25/2008
Paying Too Much?
The New York Times reports how we are able to negotiate prices at Best Buy, Home Depot, and Circuit City. Sounds like I’m back on the streets of Mexico. The reason the negotiating is happening is attributed to the sluggish economy and the abundant amount of information on the internet. Now the buying experience at these stores can become more efficient but the problem is it will be more time consuming. Of course those that want the item quick could still buy at the price listed but now every time I go to one of these stores I will feel like I’m getting ripped off if I buy the item at the listed price. You expect with the buying power these stores have you would already be getting the lowest price.
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6 comments:
I found this article to be very insightful. With competition increasing between companies I believe we will only see more and more of this. Even at the local Wal-Mart you can bargain with them if you have an ad showing that it is cheaper somewhere else. I think that the more that people can save the more likely they will research other companies with competiting prices. It seems to biol down to your marginal cost(spending time to research other companies) versus your marginal benefits (how much money you save). If you only save a dollar it might not be worth spending thirty minutes looking for a better price. However if you save thirty dollars it might be worth your time. I know that bargaining works and I believe that being able to research and negotiate are going to become increasingly imporant.
I agree with this post. I have a hard time going to retail stores because I feel like I am getting ripped off. Information is too easy to get on the internet for products and prices.The fixed costs for internet retailers are often less so they are able to sell goods at a lower price. I would rather pay less and have it shipped to me.
I am either a jerk or a mastermind because I have been able to negotiate prices at almost all retail stores on the price I pay for certain goods. My wife would argue that it is a result of having no shame but nevertheless she doesn’t complain when the manager practically gives me a permanent employee discount. Haggling prices usually takes no prep time at all. I like to think that employees are people too and inside each one of them is a desire to get back at “The Man.” One could almost call it “Reverse-price discrimination.” My motto when it comes to big business is as follows, “I am going to pay the price I think is fair, you are going to let me, and you are going to like it!”
I wonder if Wal-Mart had anything to do with the haggling in retail stores. Starting years ago, Wal-Mart said that if you found a coupon or a product cheaper at another store, Wal-Mart will match the price. So maybe Wal-Mart is the trendsetter.
P.S. I think Findlay is indeed a shameless mastermind. But it takes all kinds to make the world go round!
I wonder if this is really worth anyone's time.
Revealed preference says that it is.
But, I can't see the savings being too large. So here's the thing: if people think this is a worthwhile way to spend their time, and the savings are large, it means they don't value other ways to spend their time very much.
How does this make you feel?
Oh, and, -1 on William for a spelling error.
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