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0 pointschmod7753d ago0 comments

The time you'd need to compare products also has value. Saving that time by buying a trusted brand is not inefficiency. You'd be poorer if you actually went out of your way comparing thousands of products.

If your model of an ideal market suggests that the realistic and practical approach is inefficient, i.e. your model fails when confronted by reality, your model is horseshit.

Also brand recognition and trust has real value because clearly people are willing to pay for it. Value isn't something intrinsic in an object. Value derives from what people are willing to pay. If people pay more for a rock with an Apple logo on it, then the rock with the Apple logo is more valuable. It's a quality other rocks don't have.

And what does "non-economic reasons" even mean? Should we all only drink tap water because it's cheaper and keeps us alive just as well? Or are we allowed to have some pleasure in life as well?

What in the...

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deepsun3d ago

The time you need to find out competitor pricing (quote) is also inefficiency. Ideally (unachievable of course) all the options and prices (and fair comparison based on product utility only) is immediately available for any customer upon demand, with zero time spent on research.

Irrational behavior is when customers choose a product not for its utility divided by price (but note that pleasure is a type of utility).

Now, exactly how to calculate aforementioned utility is a big pandora box, the whole schools of economists grew up on that question.

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