When I was considering whether or not I objected to various types of advertising, it seemed like a substantial question to consider would be information asymmetry, since that seems to be a substantial part of ads.
For instance take the following advertisement:
Buy one get one free.
And then much later in small print Items ring up at 50% off regular price. (After all, it doesn't help you sell as much of a profit if they just buy one, there is no reason to specifically call attention to this.)
And then not even stated on the page And by "regular price", we mean what other people might consider a fake price that the goods are at only the legally minimum required amount of time so that we can claim that they have been discounted, because people love getting discounts and we know this.
Or for anecdotes, the "regular price" of a store brand of Diet soda I buy frequently is now 1.19. I don't think I actually remember ever seeing it at that price. It is always at a "discount" However, it is now more expensive than it used to be. They can raise the price and discount at the same time.
It seems like in general, a lot of these kinds of sales tactics are specifically related to information asymmetry.
Now, this kind of information asymmetry can be reduced.
For instance, consider an app where you can scan the barcode and get a rescalable graph of the price which shows the information about the price over time, or if you wanted to be thorough, information about the price over time at rival stores.
Basically, like the app in this link, but even more so: http://www.psfk.com/2012/01/amazon-retail-showroom.html since that only compares to Amazon's current prices.
That's just going from one data point to two, and retail establishments are already objecting because it is hurting their sales. Imagine if you could instantly generate a three dimensional graph which compared the past year of prices over time at 10 stores and the reason for discounting. All of that is publicly available information. And it wouldn't require any new hardware to make such an app. So it seems very likely it might happen in the future.
Then you could have customers who upon seeing your ad would say: "Well, I could buy this TV here at Best Buy at 50% off for 400 dollars, but Belmont TV is probably going to have it for 300 dollars when they have their birthday sale in a few days, so I'll wait and then ship it from there."
This app seems like it would be a good thing to have.
That's a bit longer than I thought it would be, but it does seem to cover the bases. What do you think?
In recent posts, I have predicted that, if not otherwise prevented from doing so, some people will behave stupidly and suffer the consequences: "If people have a right to be stupid, the market will respond by supplying all the stupidity that can be sold." People misinterpret this as indicating that I take a policy stance in favor of regulation. It indicates no such thing. It is meant purely as guess about empirical consequences - a testable prediction on a question of simple fact.
Perhaps I would be less misinterpreted if I also told "the other side of the story" - inveighed at length about the reasons why bureaucrats are not perfect rationalists guarding our net best interests. But ideally, I shouldn't have to go to such lengths. Ideally, I could make a prediction about a strictly factual question without this being interpreted as a policy stance, or as a stance on logically distinct factual questions.
Yet it would appear that there are two and only two sides to the issue - pro-regulation and anti-regulation. All arguments are either allied soldiers or enemy soldiers; they fight on one side or the other. Any allied soldier can be deployed to fight any enemy soldier and vice versa. Whatever argument pushes one side up, pushes the other side down.
I understand that there are continuing fights about regulation, that this battle is viewed as important, and that people caught up in such battle may not want to let a pro-Green point go past without parrying with a Blue counterpoint. But these battle reflexes have developed too far. If I remark that victims of car accidents include minor children who had to be pushed screaming into the car on the way to school, anyone who is anti-regulation instantly suspects me of trying to pull out an emotional trump card. But I was not trying to get cars banned. I was trying to make a point about how emotional trump cards fail to trump the universe.
I have previously predicted on the strictly factual matter of whether, in the absence of regulation, people will get hurt. (Yes.) I have also indicated as a matter of moral judgment that I do not think they deserve to get hurt, because being stupid is not the same as being malicious. Furthermore there are such things as minor children and pedestrians.
I shouldn't have to say this, but apparently I do, so, for the record, here is "the other side of the story":
The FDA prevents 5,000 casualties per year but causes at least 20,000-120,000 casualties by delaying approval of beneficial medications. The second number is calculated only by looking at delays in the introduction of medications eventually approved - not medications never approved, or medications for which approval was never sought. FDA fatalities are comparable to the annual number of fatal car accidents, but the noneffects of medications not approved don't make the evening news. A bureaucrat's chief incentive is not to approve anything that will ever harm anyone in a way that makes it into the newspaper; no other cost-benefit calculus is involved as an actual career incentive. The bureaucracy as a whole may have an incentive to approve at least some new products - if the FDA never approved a new medication, Congress would become suspicious - but any individual bureaucrat has an unlimited incentive to say no. Regulators have no career motive to do any sort of cost-benefit calculation - except of course for the easy career-benefit calculation. A product with a failure mode spectacular enough to make the newspapers will be banned regardless of what other good it might do; one-reason decisionmaking. As with the FAA banning toenail clippers on planes, "safety precautions" are primarily an ostentatious display of costly efforts so that, when a catastrophe does occur, the agency will be seen to have tried its hardest.
Government = ordinary human fallibility + poor incentives + organizational overhead + guns.
But this does not change the consequences of nonregulation. Children will still die horrible deaths in car accidents and they still will not deserve it.
I understand that debates are not conducted in front of perfectly rational audiences. We all know what happens when you try to trade off a sacred value against a nonsacred value. It's why, when someone says, "But if you don't ban cars, people will die in car crashes!" you don't say "Yes, people will die horrible flaming deaths and they don't deserve it. But it's worth it so I don't have to walk to work in the morning." Instead you say, "How dare you take away our freedom to drive? We'll decide for ourselves; we're just as good at making decisions as you are." So go ahead and say that, then. But think to yourself, in the silent privacy of your thoughts if you must: And yet they will still die, and they will not deserve it.
That way, when Sebastian Thrun comes up with a scheme to automate the highways, and claims it will eliminate nearly all traffic accidents, you can pay appropriate attention.
So too with those other horrible consequences of stupidity that I may dwell upon in later posts. Just because (you believe) regulation may not be able to solve these problems, doesn't mean we wouldn't be very interested in a proposal to solve them by other means.
People are hurt by free markets, just as they're hurt by automobiles - torn up by huge powerful mindless machines with imperfect human operators. It may not be the course of wisdom to fix these problems by resorting to the blunt sledgehammer of ban-the-bad-thing, by wishing to the fairy godmother of government and her magic wand of law. But then people will still get hurt. They will lose their jobs, lose their pensions, lose their health insurance, be ground down to bloody stumps by poverty, perhaps die, and they won't deserve it either.
So am I Blue or Green on regulation, then? I consider myself neither. Imagine, for a moment, that much of what the Greens said about the downside of the Blue policy was true - that, left to the mercy of the free market, many people would be crushed by powers far beyond their understanding, nor would they deserve it. And imagine that most of what the Blues said about the downside of the Green policy was also true - that regulators were fallible humans with poor incentives, whacking on delicately balanced forces with a sledgehammer.
Close your eyes and imagine it. Extrapolate the result. If that were true, then... then you'd have a big problem and no easy way to fix it, that's what you'd have. Does this universe look familiar?