[pembrook]

In the EU however, you generally are paying for that extra protection in the form of higher prices from retailers. There's no free lunch. The market isn't perfectly efficient, but it's pretty damn efficient. It's not like companies operating in countries where warranty is the law will suddenly say "welp, I guess we'll just have to accept less profit in the EU then, hopefully global consumers don't catch on!"

Whether you pay for extra protections via higher prices automatically (EU) or as an a la carte add-on (US) is irrelevant. On a risk adjusted basis, the cost is the same.

The EU simply cuts off the consumer's ability to take more risk for lower cost. They force you to buy the warranty every time.

[gambiting]

I'm honestly curious - how so? In all my adult life I have been comparing prices between EU and US and they are always about the same once you factor in taxes. Yes the VAT can make items slightly more expensive, but VAT has absolutely nothing to do with the retailers responsibility for the product, right?

>>On a risk adjusted basis, the cost is the same.

I'd love to see how you came to that conclusion. In EU the seller is always responsible for 2 years after sale for the product, in the US a 2 year warranty will be few hundred dollars on laptops and other expensive items. The difference is definitely not the same.

[pembrook]

This has been the subject of numerous academic papers. Again, it's not like the EU government has somehow fooled companies into losing money in the EU.

I highly doubt you're doing true absolute calculations factoring in all the supply chain, macroeconomic, and tax considerations.

The reason you can't easily compare this at a glance is complicated by currency fluctuations, shipping costs, labor costs, embedded VAT in prices vs. taxes added at purchase, VAT rebates, differences in EU warranty law vs. purchased warranties in the US, "discount" marketing tactics of American retailers vs. European retailers, everyday low prices vs. seasonal discounting, etc.

Trust me when I say you're not enjoying some free lunch at the expense of corporate earnings by living in the EU. You're simply restricting consumer and entrepreneur choices, by preemptively deciding what the consumer needs.

Which can be good or bad depending on the item in question. Computer hardware? Not sure we need the nanny state involved, there's healthy competition and you run the risk of stifling new business models from arising (it's no secret that Europe isn't exactly a hotbed of tech innovation). Healthcare? Now that's a different story.

[gambiting]

>>Trust me when I say you're not enjoying some free lunch at the expense of corporate earnings by living in the EU. You're simply restricting consumer and entrepreneur choices, by preemptively deciding what the consumer needs.

I mean, I do see your point. But we as a society have decided that sellers should be responsible for a minimum of 2 years for any items they sell. That's just what we (society) require from anyone willing to run a business. We also require them not to dump toxic waste into rivers, and pay their taxes - all enterpreneurs the world over have certain obligations to the state, US just placed the bar lower than elsewhere. I don't mean to say which approach is "right", but I do mean to say that as a consumer I like having greater protections in the EU, even if "perhaps" it means the products bought here cost more.

[iamcurious]

> This has been the subject of numerous academic papers.

Those papers sound interesting. Can you recommend any?

>it's no secret that Europe isn't exactly a hotbed of tech innovation

When you mean innovation, do you refer to Xerox and Bell Labs? Or to Microsoft and Apple? Cause europe has a lot of the first kind, not much of the second kind. And even when they do, they might end being sold out. Like Nokia and Skype.

[fieldcny]

Companies absolutely accept and expect different margins in different countries, just look at drug prices. Companies maximize their margins in the markets they participate in.

You are right that it is not a free lunch it’s just a difference in the margin.

You could also argue that two year warranties in the us are priced obscenely (like drugs).