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(The Atlantic)   The lesson to learn from Black Friday: Shopping is a sport, and corporations are better at it than any of us   (theatlantic.com) divider line 19
    More: PSA, Black Friday, Dan Ariely, Williams-Sonoma, deadweight, behavioral economics, lessons, The Wall Street Journal Report, sports  
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2897 clicks; posted to Main » on 29 Nov 2013 at 9:25 AM (39 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



19 Comments   (+0 »)
   
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2013-11-29 09:26:52 AM
Black Friday winners and losers?

/dnrta
 
2013-11-29 09:28:39 AM
Which leads me to believe some people simply want to play the game rather than win anything.
 
2013-11-29 09:29:42 AM
Shopping is a sport all right.  The customers are the prey.  Vote with your wallets, folks.  It's the only thing you can do to have any impact any more.

Any idiot who went out in a consumer feeding frenzy last night or this morning gave up the right to biatch about "evil corporations" until next Thanksgiving.  Better luck next year.
 
2013-11-29 09:32:35 AM

AngryDragon: Shopping is a sport all right.  The customers are the prey.  Vote with your wallets, folks.  It's the only thing you can do to have any impact any more.

Any idiot who went out in a consumer feeding frenzy last night or this morning gave up the right to biatch about "evil corporations" until next Thanksgiving.  Better luck next year.


No, any idiot who bought an X Box One or Playstation 4 has no right to biatch about evil corporations, not after the government of China ordered Chinese university students into "internships" at the Foxconn plant on the production lines of the X Box One and Playstation 4. Enjoy your entertainment brought to you by slave labor.
 
2013-11-29 09:47:02 AM

Slaves2Darkness: AngryDragon: Shopping is a sport all right.  The customers are the prey.  Vote with your wallets, folks.  It's the only thing you can do to have any impact any more.

Any idiot who went out in a consumer feeding frenzy last night or this morning gave up the right to biatch about "evil corporations" until next Thanksgiving.  Better luck next year.

No, any idiot who bought an X Box One or Playstation 4 has no right to biatch about evil corporations, not after the government of China ordered Chinese university students into "internships" at the Foxconn plant on the production lines of the X Box One and Playstation 4. Enjoy your entertainment brought to you by slave labor.


Oh please. Have you looked at the tags on any random consumer product you buy? Everything is made in China now. Chances are, whatever you're typing on was built in China. Come down off your high horse and realize this is the world we live in. My iPad is made in China. My iPhone is made in China. My TV remote is made in China. The plate I ate breakfast off of is made in China. My wallet is made in China. My toenail clippers, silverware, picture frames, etc etc etc
/the lotion I fapped with though, that was made in the old US of A
 
2013-11-29 09:47:15 AM
If you want to understand why it's so hard to find the best deal for an item, look no further than bids on new items on eBay. It's not hard to find items that have been bid up above MSRP. If that's an item you might have been bidding on, you're competing with idiots.
 
2013-11-29 09:47:18 AM
Rebates test customers' memories and willpower. A $10 rebate on a $40 candlestick feels right in the moment. But four months later, when the words "candlestick rebate" flash in your brain at work, are you really going to take time out of your day to save the equivalent of one day's lunch?

Rebates are great if you don't need the cash right now and you can be bothered to mail the thing in. I purchased a number of bourbon and gin bottles last year that had rebates that I mailed in. I didn't pay more for these bottles than I normally do. It was nice to get a check for $10-$20 in the mail on occasion.
 
2013-11-29 09:58:26 AM
993's, made in the USA.  They cost about $50 more than the Fabrique en Chine equivalent.  They last appropriately longer, so the Self Righteousness they provide is free.

thumbs3.ebaystatic.com
 
2013-11-29 10:00:38 AM

autopsybeverage: If you want to understand why it's so hard to find the best deal for an item, look no further than bids on new items on eBay. It's not hard to find items that have been bid up above MSRP. If that's an item you might have been bidding on, you're competing with idiots.


It's worse than that: if you're bidding on any item, it's very likely that you will overpay if you win, since you paid more than anybody else thought the item was worth. Economists call this the "winner's curse".

There's a few ways to avoid the "winner's curse":

1 -- if the item means more to you than to other bidders (e.g. sentimental value, or completing a set that is more valuable together than apart), you can bid the most and still gain.

2 -- if the auction is not really competitive, i.e. a flawed market (e.g. few bidders know about it). There have been frequent scandals in the antiques auction market where dealers would set up illegal rings, i.e. agreements not to bid up items against each other. Each would then get items relatively cheap that they could resell at a profit at retail.

3 -- If your information is better than anybody else's. The winner's curse occurs because real markets have incomplete information, so everybody bidding has to independently estimate the market value of the item. (In an imaginary perfect market of complete information, everybody would know the value of the item both to themselves and to the market as a whole, and nobody would overbid). In principle we assume that the average bid in such circumstances is closest to the true market value, and the winning bid is therefore too high. But if you have unique information, this doesn't apply.

For example, suppose you are a wireless carrier bidding for 4G spectrum at the beginning of the smartphone era, and you have realized something your competitors have not, that data bandwidth is going to become dramatically more valuable in a short time. You are therefore willing to bid more for spectrum, valuing it for data, than your competitors who value it only for voice. The asymmetry of information breaks the curse.
 
2013-11-29 10:01:06 AM

jaylectricity: Rebates test customers' memories and willpower. A $10 rebate on a $40 candlestick feels right in the moment. But four months later, when the words "candlestick rebate" flash in your brain at work, are you really going to take time out of your day to save the equivalent of one day's lunch?

Rebates are great if you don't need the cash right now and you can be bothered to mail the thing in. I purchased a number of bourbon and gin bottles last year that had rebates that I mailed in. I didn't pay more for these bottles than I normally do. It was nice to get a check for $10-$20 in the mail on occasion.


.. and you don't mind giving out your name and address to an advertising firm that will certainly flood your mailbox with special offers for the next five years.
 
2013-11-29 10:06:22 AM

Ker_Thwap: jaylectricity: Rebates test customers' memories and willpower. A $10 rebate on a $40 candlestick feels right in the moment. But four months later, when the words "candlestick rebate" flash in your brain at work, are you really going to take time out of your day to save the equivalent of one day's lunch?

Rebates are great if you don't need the cash right now and you can be bothered to mail the thing in. I purchased a number of bourbon and gin bottles last year that had rebates that I mailed in. I didn't pay more for these bottles than I normally do. It was nice to get a check for $10-$20 in the mail on occasion.

.. and you don't mind giving out your name and address to an advertising firm that will certainly flood your mailbox with special offers for the next five years.


It's a mailbox. Who cares? You just take the stuff out of the box, remove the mail you want, then dump the rest in the recycle bin. Same as always.
 
2013-11-29 10:27:31 AM

AngryDragon: Vote with your wallets, folks.



I think that's exactly what people are doing.
 
2013-11-29 10:30:00 AM

DubyaHater: /the lotion I fapped with though, that was made in the old US of A



/Swiss Navy. not that I would know...
 
2013-11-29 10:44:12 AM

czetie: autopsybeverage: If you want to understand why it's so hard to find the best deal for an item, look no further than bids on new items on eBay. It's not hard to find items that have been bid up above MSRP. If that's an item you might have been bidding on, you're competing with idiots.

It's worse than that: if you're bidding on any item, it's very likely that you will overpay if you win, since you paid more than anybody else thought the item was worth. Economists call this the "winner's curse".

There's a few ways to avoid the "winner's curse":

1 -- if the item means more to you than to other bidders (e.g. sentimental value, or completing a set that is more valuable together than apart), you can bid the most and still gain.

2 -- if the auction is not really competitive, i.e. a flawed market (e.g. few bidders know about it). There have been frequent scandals in the antiques auction market where dealers would set up illegal rings, i.e. agreements not to bid up items against each other. Each would then get items relatively cheap that they could resell at a profit at retail.

3 -- If your information is better than anybody else's. The winner's curse occurs because real markets have incomplete information, so everybody bidding has to independently estimate the market value of the item. (In an imaginary perfect market of complete information, everybody would know the value of the item both to themselves and to the market as a whole, and nobody would overbid). In principle we assume that the average bid in such circumstances is closest to the true market value, and the winning bid is therefore too high. But if you have unique information, this doesn't apply.

For example, suppose you are a wireless carrier bidding for 4G spectrum at the beginning of the smartphone era, and you have realized something your competitors have not, that data bandwidth is going to become dramatically more valuable in a short time. You are therefore willing to bid more for spectrum, valuing it for data, than your competitors who value it only for voice. The asymmetry of information breaks the curse.


Incredibly smart analysis.
 
2013-11-29 11:03:18 AM

czetie: autopsybeverage: If you want to understand why it's so hard to find the best deal for an item, look no further than bids on new items on eBay. It's not hard to find items that have been bid up above MSRP. If that's an item you might have been bidding on, you're competing with idiots.

It's worse than that: if you're bidding on any item, it's very likely that you will overpay if you win, since you paid more than anybody else thought the item was worth. Economists call this the "winner's curse".

There's a few ways to avoid the "winner's curse":

1 -- if the item means more to you than to other bidders (e.g. sentimental value, or completing a set that is more valuable together than apart), you can bid the most and still gain.

2 -- if the auction is not really competitive, i.e. a flawed market (e.g. few bidders know about it). There have been frequent scandals in the antiques auction market where dealers would set up illegal rings, i.e. agreements not to bid up items against each other. Each would then get items relatively cheap that they could resell at a profit at retail.

3 -- If your information is better than anybody else's. The winner's curse occurs because real markets have incomplete information, so everybody bidding has to independently estimate the market value of the item. (In an imaginary perfect market of complete information, everybody would know the value of the item both to themselves and to the market as a whole, and nobody would overbid). In principle we assume that the average bid in such circumstances is closest to the true market value, and the winning bid is therefore too high. But if you have unique information, this doesn't apply.

For example, suppose you are a wireless carrier bidding for 4G spectrum at the beginning of the smartphone era, and you have realized something your competitors have not, that data bandwidth is going to become dramatically more valuable in a short time. You are therefore willing to bid more for spectrum, valuing it for data, than your competitors who value it only for voice. The asymmetry of information breaks the curse.


Interesting points, but I'm thinking more along the lines of any common widget that is always, more or less, available at, say, $50 MSRP. You can usually find this item for a bit less than that in a retail store, but not at any significant savings.

Where your "winner's curse" turns into a WTF moment, in my eyes, is when a bidder willingly pays more for a common good than he or she would pay during a short trip to the local store to pick up such an item.
 
2013-11-29 11:23:58 AM

randomarrangement: AngryDragon: Vote with your wallets, folks.


I think that's exactly what people are doing.


Unfortunately, you're right.  I wonder how many of those people blowing their money at Walmart this morning can appreciate the irony. The products they're buying are being made by someone who has the job they USED to have.
 
2013-11-29 11:54:12 AM

autopsybeverage: Where your "winner's curse" turns into a WTF moment, in my eyes, is when a bidder willingly pays more for a common good than he or she would pay during a short trip to the local store to pick up such an item.


Very true. One exceptional example of this was during the Dot Com crash when firms like Webvan were auctioning off their assets. People were bidding more than the new, retail price for used prosaic items like TVs, fridges, and Aeron chairs.

One of the most interesting things about auctions in general is the way participants routinely behave irrationally.
 
2013-11-29 12:18:49 PM

DubyaHater: Oh please. Have you looked at the tags on any random consumer product you buy? Everything is made in China now. Chances are, whatever you're typing on was built in China. Come down off your high horse and realize this is the world we live in. My iPad is made in China. My iPhone is made in China. My TV remote is made in China. The plate I ate breakfast off of is made in China. My wallet is made in China. My toenail clippers, silverware, picture frames, etc etc etc


Nod.  As long as energy prices are low, manufacturing companies will build factories in low-wage countries.  When the wages get too high, they look for the next country with enough stability to invest in.  And if manufacturing does really return to the mainland US, chances are that it will be highly automated.


Back to the article... one thing I do these days when shopping at a sale is to check prices using a price-checker app.  I also like to check the historical prices to see if the price has crept up or not.  The RedLaser app on my smartphone has recouped the price of my phone several times over.

And while Black Friday is a notorious day for retailers to jack up prices and then offer a huge "discount", there is no bigger scam than going out of business sales.  I've been to a few where items were 90% off, yet were still cheaper elsewhere.
 
2013-11-29 04:34:53 PM
One of my biz profs says Black Friday is also a way a lot of companies test new products. They sell it dirt cheap or at a loss, then re-evaluate the product based on customer complaints or praises. Then, they improve the product to meet/exceed what buyers said they wanted and re-release it around Christmas at a higher price.
 
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