Not What They Seem To Be

Posted on by Mike 6 Comments

Does anyone think that fake pricing is not only annoying, but also immoral?

Now, airlines regularly sell seats at a price, but tack on other fees not mentioned therein. For example, we recently bought airline tickets to fly from Orlando to Miami for $89 (including taxes, tags, license, and union dues). We were encouraged to pre-purchase baggage tickets 1to check the bags to save money and ensure our bags would be on the same flight as we will be. I did that today on the Internet. The cost? $55.00. That’s over 61% of the ticket price.

Travel agents are famous for this, quoting one price for a vacation or a cruise then in tiny print reveal that the price does not include government taxes and other fees. Is this materially different from the bait and switch tactics of retailers who advertise an item at a bargain price but have only more expensive items in stock?

What other examples of this kind of fake pricing have you encountered?

Footnotes

Footnotes
↑1 to check the bags

Experts

Posted on by Mike 1 Comment

“An expert must be bold if he hopes to alchemize his homespun theory into conventional wisdom. His best chance of doing so is to engage the public’s emotions, for emotion is the enemy of rational argument.”, [Steven D. Levitt and Stephen J. Dubner, Freakonomics]

So how do you suppose this quote applies to the election?

Theory of Rational Expectation

Posted on by Mike 4 Comments

OK, so Congress passed the bailout (and about $150 billion of pork) and the stock market continues to tank. Could it be that fear, not tight credit, is fueling the market? Did it help that both presidential candidates said that this is the worst financial crisis since the Great Depression? Do the cries of the media help the situation?

The Theory of Rational Expectation in economics says that the economy will follow the expectations of the population. Are we expecting the economy to tank?