jedcstuff

2006-02-10

Price vs value-added

Price vs value-added

This is one of my philosophical musings journal blogging entries.

Pondering the contrast between price being established by the value added to a product, versus price being established by what the market will bear, could the preference of the latter mode have long term consequences? Beyond the effects of "karma", that is.

"Negotiative agreement" seems to be able to account for the disparity formed whereby if one gets a dollar for a pound of x, then instead, a dollar for a half pound of x, then a dollar for a microscopic speck of x, it is considered ever better business practice; but if the dollar is received for not even that infinitesimal speck of x, it suddenly is considered a criminal activity: "theft." The difference seems to be that the giving of more for less in return, is made justifiable (and even good expert business practice) by having done a negotiation agreement with the person losing out of comparable value. This seems related to the ancient process of "barter" where people quibbled over price of something sold at the bazaar. Related also seems to be that the process needs to be slow to be acceptable, incremental changes of price for a given unchanging item being slow enough to not be noticed that it has gone from a reasonable price to getting almost nothing for the same price. Or getting the same thing but for an incredibly greater price paid.

Involved seems to generally be scarcity vs. need.

Somewhere in all this I feel it is only moral to raise price only in direct proportion to the utility added to the object. "Value-added" may refer to this. But clearly, the rest of the world of people don't feel this way.

Yet in the real world of people, I notice that people generally enjoy the process of gaming to get something re price, such as at an auction, perhaps archetypal of this kind of activity. A form of competition, a game, involving things (or services to be rendered) vs price.

This "negotiative agreement" process seems to make all business things morally right.

2 Comments:

  • So profit/reward is a MORAL issue not an Economy concept?

    By Blogger Carol, At 8:22 AM  

  • So profit/reward is a MORAL issue not an Economy concept?

    By Blogger Carol, At 8:23 AM  

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