Supply and demand is very easy to prove. Just go to any auction. The market clearing price is what someone will pay at the time.
Some markets are dominated by the buyers, others by the sellers, others change from time to time.
Comment on What happened to Airbnb?
KevonLooney@lemm.ee 10 months ago- AirBNB is definitely not the only rental site out there. There are better, more specialized ones.
- I don’t have any rentals, I just know how much work they are. Can you find anything wrong with my description?
- Supply and demand is very easy to prove. Just go to any auction. The market clearing price is what someone will pay at the time.
NeoNachtwaechter@lemmy.world 10 months ago
Excrubulent@slrpnk.net 10 months ago
You don’t have to be a monopoly to hold a chokepoint. The industry holds the chokepoint.
Your description was irrelevant, but also… cry me a fucking river. If you they don’t like doing the work, maybe they could get some sorg if agent to handle the tenants for them, abd maybe the agent could get them to sign long term leases so they can vet them more carefully. Why not do that? Because that alteady exists and makes less money? Okay? Who cares? Jobs are work, here’s Tom with the weather.
Auctions suck for the most part, that’s why ebay mostly just sells things now. Look at the uproar when Uber does surge pricing. People don’t put up with it. Turns out that outside of a very few artificial situations like an auction, sellers basically just set prices, because unless they’ve specifically opted into an auction environment, consumers don’t put up with it.
jmp242@sopuli.xyz 10 months ago
Sellers can set prices, but for many things there are alternatives and hence more than one seller. Apple sets the iPhone prices, but you can substitute an Android pretty effectively, and there are multiple manufacturers of Android phones at lots of price points. If Apple decided to set the base price of an iPhone to 100k, people would not get mortgages, they’d buy a 500 dollar Android.
This holds true for lots of things, but housing is distorted by lots of factors. But housing doesn’t disprove supply and demand.
Excrubulent@slrpnk.net 10 months ago
I am not ignorant of the extremely simple story that you will learn in econ 101 - and sadly in more advances courses as well.
It’s just that it’s only a theory. You should perhaps pay attention to the information you gave, and how you didn’t say, “observation of market behaviour bears out the supply & demand theory”, you just waved vaguely in the direction of a mechanism, with no reference to data.
If you look at the many studies into the matter where economists accidentally - and sometimes intentionally - did science on this, they found no actual data to support supply and demand as a model of pricing. It simply doesn’t hold true, and yet it’s taught constantly, and if you try to google this, you’ll just find publication after publication talking about the “law” of supply & demand. But it’s not a law, it is simply an assumption.
When looking at market behaviour and when talking to price setters, there is no data to support the theory, and nobody in the business pays attention to supply & demand. All the models that seem to work share the feature that they are set by the supply chain.
This article gathers the relevant information and has sources linked: strangematters.coop/supply-chain-theory-of-inflat…
jmp242@sopuli.xyz 10 months ago
I don’t mean supply and demand in the extremely vague sense of that essay though. I mean individual people purchases and company sales. Something is happening when a person decides or not to buy something.
If in the aggregate people buy one product instead of another, that affects the business and they need to either appeal on other grounds or drop prices to compete.
I know there are different demand elasticity for different people for different things. That doesn’t mean that price is completely arbitrary and buyers have no leverage at all. I think most of that essay is just saying to ignore macroeconomics, which as far as I ever learned (as taking the required class and a very minor interest in terms of expertise - so not much) was a major simplification to express large groups of people’s actions. So of course it comes down to individual transactions. But I think the idea makes even more intuitive sense there.
Lets say I’m at a craft fair as a buyer. Someone wants to price their ceramic mug at 50 dollars. They can do that, but I am going to pass and look at other sellers. If the seller 30 feet down also has artsy ceramic mugs, but for 30 dollars - then that might make people there question the 50 dollar mug. Prices tend to affect demand and hence volume at least in my personal experience.
It’s not the end all of things. I would take more flights if the price was 1/2 of what it is, but I don’t know if I would take even more as it went cheaper. There’s only so much travel I want to do in a year.
All that said - I agree that business just set prices but outside of maybe hospital bills, they’re not arbitrary. If a business is constantly selling out they will raise prices I would argue that it seems pretty obvious to me that a lot of “covid” pricing was businesses just charging more and seeing if people would pay.
On the flip side, businesses regularly set lower prices on stuff that isn’t moving. This ranges from simple “manager markdowns” all the way to the liquidation of merchandise to sellers like Ollie’s. For small businesses they’ll often see if you bite on something at the arbitrary price, but if not and the item has sat there too long they might haggle with you to get something vs an unending storage cost.
Even if you argue that we don’t have an auction for many of the things we buy so the price is arbitrary and set by the seller - we still are almost always buying something that there are other potential buyers for. If I don’t want it at price X+10%, the impact of that depends on how many other potential buyers will step in to buy it. When I talk about demand, I am simplifying a paragraph to a word.
Whats more, scalpers and ebay resellers will do the whole restricted supply driving prices up for the company even if they don’t want to. We see that all the time. At that point it seems worse for the economy as the scalpers are just skimming money from buyers with no actual value provided. At least the original manufacturer could get a bonus or invest in more capacity if they grabbed that money.