[thayne]

If capatilism was working the way it was supposed to, the customer could choose between paying more up front, but having the option of a "free" return, or paying less upfront byt having to pay for a return (or not be able to return it).

And for that matter, the customer would have enough information to know the quality of the product before purchasing, but that is often not possible.

[AnthonyMouse]

Everybody knows the cows are not actually spheres. It's about how you deal with it.

If you try to sell "return insurance" then some customers don't buy it but end up wanting to return it anyway and then leave you a bad review for not having free returns. That costs you more than charging somewhat higher prices and having free returns, so that's what you do instead. But now efficiency requires some other mechanism of allowing the people who don't do excessive returns to pay a lower price.

Also, suppose you actually did sell return insurance. Then you notice that a subset of the customers who buy return insurance rarely use it, so you want to give them a discount to try to get more of their business.

[wat10000]

Your idea of charging less to customers who know what they want is also a spherical cow.

They’ll buy your entire life from a data broker and charge you more because yesterday you accidentally viewed some Lamborghini seat covers. They’ll calculate that you have less willpower on Thursday nights and change their advertised price from $10 to ON SALE $2 off $12. They’ll just do coincidentally use the same algorithm to determine their price as all the other stores do so they don’t have to worry about competing on price.

[AnthonyMouse]

> They’ll buy your entire life from a data broker and charge you more because yesterday you accidentally viewed some Lamborghini seat covers.

You're describing incompetence. You're not actually rich just because you viewed something by accident which means you're not actually price-insensitive and they just lost the sale to someone else. That has nothing to do with algorithms, incompetent companies put themselves at a disadvantage and make fewer sales than other companies all else equal, and the ones that are sufficiently bad at it go bust.

> They’ll calculate that you have less willpower on Thursday nights and change their advertised price from $10 to ON SALE $2 off $12.

They do that regardless of whether it's Thursday.

> They’ll just do coincidentally use the same algorithm to determine their price as all the other stores do so they don’t have to worry about competing on price.

This again has nothing to do with algorithms. They can do the same thing by just looking at the prices other merchants are charging and setting the same ones, and if you really want to prevent this then the law you want is the one that prohibits manufacturers from enforcing "no sales below MSRP" against retailers.

Because in a market with a large number of retailers, the individual retailers all have the incentive to defect from a price fixing scheme, because increasing your market share from 0.5% to 20% by having the lowest price when those other idiots are refusing to compete on price is worth way more than having slightly better margins. This is why it's important that the number of competitors be large instead of small. Laws should be directed to ensuring that rather than trying to micromanage a consolidated market full of incumbents so large they can buy the government anyway.

[wat10000]

What if they’re not incompetent and you intentionally looked at Lamborghini seat covers, then, and correctly flagged you as willing to pay more as a result?

What if that fake sale tactic only works on you when your willpower is low and they know it?

Price fixing by software is a real thing. I agree that ensuring lots of competitors is a better way to avoid it. How would Colorado do that?

[AnthonyMouse]

> What if they’re not incompetent and you intentionally looked at Lamborghini seat covers, then, and correctly flagged you as willing to pay more as a result?

What they're more likely to do is show you higher end products, because a rich person (or the person they hire to buy things for them) still has the capacity to compare prices for the same product and then charging more for the same thing still loses them the sale in a competitive market. Whereas if they show you the premium product instead of the base product because they've correctly surmised that you'll prefer the better product even if it costs more, is that even bad?

> What if that fake sale tactic only works on you when your willpower is low and they know it?

Then they still use it all the time because that's more effective than trying to guess when your willpower is lower and sometimes being wrong.

> Price fixing by software is a real thing.

It's a hypothetical thing where it works as long as everybody is using the same software. Like the other methods of price fixing, it stops working as soon as anybody does something different because then customers just start buying from them, and then we're back to needing to make sure there are enough competitors that that's what happens.

> I agree that ensuring lots of competitors is a better way to avoid it. How would Colorado do that?

In a lot of markets it's already the case but they're applying laws like this to them anyway. In consolidated markets, we largely already have antitrust laws and the main problem is a lack of enforcement, so maybe go chop up some large corporations.

There are also some cases when the courts issue a bad antitrust interpretation and then you need the legislature to pass a short bill that basically points to that case and says "no, the opposite of that".

[wat10000]

Dynamic personalized pricing is a real thing. Has been for ages. The old-fashioned techniques are coupons and loyalty cards, or just having higher prices in higher-end stores. Competition isn't nearly as perfect as you say. It's very common for high-end stores to sell identical items at higher prices and still sell plenty of them.

These days you can do a much better job if you have data about your prospective customer. This is not a hypothetical. For example, Target was found to charge higher prices in their app if your location was close to one of their stores. Orbits and Delta have both been found to offer personalized prices as well.

https://retailwire.com/discussion/will-targets-dynamic-prici...

https://www.fastsimon.com/ecommerce-wiki/personalization/dyn...

https://www.pbs.org/newshour/economy/personalized-pricing-ha...

Price fixing where everybody uses the same software is a real thing. RealPage recently settled a lawsuit over this.

You seem to be taking a very Libertarian approach where you assume economics 101 wins out over anything more complex, but if you look at what's actually going on in the world this is not the case.