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0 pointsjaredklewis8y ago0 comments

> No market can function properly without all parties having the same information

What markets function like this? I have no idea what the cost of growing, harvesting, shipping, and selling a banana is. At every step of this process there are capital investments, labor costs, and profit margins that are totally opaque to me. And yet I can look at the price of a banana and decide if I want to spend the money or not. One beautiful aspect of markets is that not everyone has to spend years researching every purchasing decision. The makert sets a price for you. If one company has margins that are too high, another steps in to take some of that profit, by offering at a lower price until it reaches equilibrium.

The job market seems similar. I don’t know how companies set their offer price but I am capable of evaluating offers all the same.

0 comments

emblaegh8y ago

You know how much a banana is worth because you've seen how much people charge for bananas from different origins in different grocery stores. Knowing how much your peers are getting paid is important information when evaluate an offer, and helps to ensure a more efficient job market.

freshhawk8y ago

So you feel that if you knew that other consumers paid different prices for the same products but that information wasn't available to you that would be fine?

That would be the equivalent analogy. That you know you are paying the same price for bananas from the corner store as everyone else.

lmm8y ago

> If one company has margins that are too high, another steps in to take some of that profit, by offering at a lower price until it reaches equilibrium.

Right, but that mechanism is only possible if information is public. You don't know about the pricing of growing, harvesting, shipping and selling bananas - but it's possible to find out, and a company looking to enter the market would find out. You can rely on market pricing because the market lets you outsource your research to other market participants, but that only works if research is possible in the first place.

crdoconnor8y ago

>One beautiful aspect of markets is that not everyone has to spend years researching every purchasing decision.

Largely because somebody else out there is doing it on your behalf in order to make a buck.

Without market transparency you wouldn't be able to rely upon this happening.

maxxxxx8y ago

I can go a lot of stores and ask them how much a banana costs. Then I can compare prices. However, I can't go to companies and ask them how much they pay for a position. That means I can't compare. I don't know what the market price is.

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