List price, furniture, college

A few random tidbits are strangely connected:

The cost of college, the cost of Herman Miller furniture, and the price I charge on Craigslist.

I was listening to NPR today, the show called Planet Money (see Footnote #1).  Episode 370 from last year is called "The Real Price of College."  For any of you who have not paid college tuition in the last 10 years, the price has doubled over that time period, and the trend continues.  My business school charged 1300/credit in 2011.  While that is quite expensive, it is not the most expensive program out there.  Apparently colleges are increasing prices dramatically because we, the American college student target audience, think that the more expensive the program is, the better it is.  "Please take my money."

What do you think, are you more satisfied if you pay more?  If you are curious, research the Chivas Regal Effect.  (See footnote #2).  In summary, when price is the main criterion of product comparison, people think that higher price is correlated to higher value.  (I did not add a pic for Chivas Regal intentionally).  Even if I drank alcohol, I would not put expensive whiskey on my blog, it seems like posing.

Anecdotal evidence:  Three years ago I had a 50" TV that I could not give away.  As soon as I listed it for sale at $100 instead of free, I had a buyer that offered me $75.00  "Please take my money."  Believe it or not, the buyer in this story would feel more satisfied if I bargained the price up to $80, thus leading him to believe that he did not leave any money on the table.  If I quickly accept his offer of $75, he will think that he overpaid.  How can I argue with the Chivas Regal effect when I have seen it happen in my own experience?



Lastly,  office furniture.  Herman Miller is a premium brand for office furniture, and it is well known that they design and produce premium products. If you google Aeron Chair you will see this:

According to the site for Madison Seating, the list price for the chair is $930.00, but you can have it for the low, low price of 589.99.    When I see this I start to think that the typical person going out to buy something can't be fooled by this obvious pricing hooey, right?  MSRP is a joke, right?  Nonetheless, when I shop at Marshall's and see that the shirt I am buying costs twice as much at a department store I feel better about purchase.  "Please take my money."


Footnote #1

The Real Price Of College : NPR

www.npr.org

There's a huge gap between the sticker price for college tuition and the price students actually pay. On today's show, we try to figure out why.

via NPR

Footnote #2 Effects of Competitive Context and of Additional Information on Price Sensitivity

Joel Huber, Morris B. Holbrook and Barbara Kahn

Journal of Marketing Research
Vol. 23, No. 3 (Aug., 1986), pp. 250-260
Published by: American Marketing Association
Article Stable URL:http://www.jstor.org/stable/3151483

capitalism and agency

I feel like we live in a world where people are blaming capitalism for the world's evils, this is like being mad at a dollar for spending itself.

I am reminded that the high priest of the court was willing to pay Judas 30 pieces of silver to betray Christ on charges that were known to be false.  No scruples were violated to fund the sin.  Later when Judas tries to return the money, they don't put it into the temple treasury because the money is tainted.  Strangely, now the scruples are introduced.

If my product or service is used for evil, then am I tainted as well?  Does it depend on my foreknowledge of the evil practice?  When it is brought to my awareness, do I claim to be a victim of a larger system or do I change what I do?

In all these cases I am glad that I get to choose what to do, and that I have a system that lets me create a new idea and try to sell it to others.  If a person does not control the right to markets and capital, then they do not really have agency to decide any of the things that I have been writing about so far.

Free markets and capitalism do allow for evil people to manipulate the system and increase suffering, while still thinking that their hands are clean from the blood and sins of their generation.  But every other system still allows for graft, cronyism, and abuse; but does not simultaneously provide greater opportunity for accountability, beneficence, or charity.

image from Edelomahony

beginnings

I write in my journal a lot and we will see if this fills that need of recording and reflecting without becoming trite or self-serving.  The idea is that by writing an experience down, the mind organizes perceptions into a narrative, and that the process creates an output which is now able to be communicated to a listener, but the listener may or may not hear the intended narrative, and the perception of the listener is equally biased.  How do we communicate at all?  Do my words send my intended message?  Am I sending the message I intend to send?  Are perceptive and insightful listeners able to draw more from my words than I intended to express?  Am I teaching you a lesson that will serve you in your life, or am I learning a lesson and you can already see the moral at the end of the story?