RE: In Praise of Pay Toilets
I think it is good example for bundling or vertical integration. Like a free Microsoft Internet Explorer (see S. Landsburgs Slate column) the buyer is better off, if the seller offers two complementary goods like meals and toilets in a bundle than a seperate offer. If you are in a restaurant the barkeeper owns a kind of monopoly with regard to meals and a indoor toilet. Of course he can offer both seperatly and get a price where marginal revenue equals marginal costs. If he offers both together he can only charge a lower price (because marginal revenue goes up and thatswhy monopoly price goes down), but the buyer is better off and the restaurant gets more customers. Steffen
RE: In Praise of Pay Toilets
John Hull: Of course Michael Etchison may be right as well (if I read him correctly), in that firms engage in hueristic pricing and just toss bathroom maintenance into the mix. What firms think they do, and what they actually do, are neither identical nor even coextensive, of course. A firm may well adopt a policy of instituting and rigorously following procedures at the end of which an array of goods and prices will univocally emerge. Just between us, the rigor is not what it seems, in my book. It is, rather, a way of presenting what is at bottom an inherently and unavoidably imprecise, possibly inarticulate (if not inchoate) hunch about what the consequences of such an array might be. It is a matter at least as much of rhetoric, as of calculation: The act of calculation is itself rhetorical. And, not only is such an approach rhetorical, it is _not falsifiable_. The firm's response to what happens after the array is instantiated is, at bottom, heuristic, a reasonably disciplined search for a reasonably coherent and administrable plan for how to identify data as relevant and interpret them, and of what to do about the (reasonably disciplined) inferences the heuristics set up. Put the other way 'round: From the _customer's_ point of view, the entire experience of deciding to enter the premises, deciding what to do there, and so on is a mix, which is subjectively taken and assessed all at once (though much of what happens has something to do with particular parts of the experience and particular stated prices, and so on). If that is so, then whether he knows it or not, all of the seller's presentation is a mix, into which every component is willy-nilly thrown. Michael Michael E. Etchison Texas Wholesale Power Report MLE Consulting www.mleconsulting.com 1423 Jackson Road Kerrville, TX 78028 (830) 895-4005
Re: In Praise of Pay Toilets
Robin Hanson asked: Plausible, but then the question is: *why* do people have a disutility of paying for toilets? Does this fit into any pattern of the sorts of things people have a disutility of paying for? Apparently using a toilet is something that people have tradiotionally seen as something of a human right!! I recall seeing on discovery channel (that oracle of truth) that an old irish statute made it unlawful to refuse anyone in a lavatory state the access to one's toilet - jacob braestrup ps: BTW: pay toilets are unheard of at restaurants here in Denmark. they are found on train stations and in public squares etc.
Re: In Praise of Pay Toilets
John Perich wrote: Well, I made the comment originally because, in the neoclassical framework, would one have any reason to assume that any given cost WASN'T included in the final price? Your question seems straight forward, yet I'm not sure I understand. Assuming the problem is at my end, let me try again and you can tell me where I'm going wrong. That I may poorly articulate what I'm thinking is a given, so please bear with me. I face a certain state of the world and I optimize. Suppose that the government then levies a lump-sum tax. Since it doesn't affect any marginal values, it is non-distortionary, so I don't change my opitimizing behavior--I just suffer a loss of utility from the taxation (I have to enjoy less across the board). Analogously, the firm with the free bathroom experiences the cost of maintenance as just a lump-sum expense. It may be spread out, but it affects no marginal values. Since it affects no marginal values, it doesn't affect the firm's optimizing behavior--the firm just suffers lower profits as a result. The prices the firm charges for goods are the same with and without the free bathroom. Hence toilet maintenance is not a part of the prices. That's what I was thinking originally. As I mentioned before my assumptions may be wrong. I'm also neglecting secondary effects, e.g. pee for free = repeat business, etc. Anyway, let me know if I make no sense or if my reasoning is totally out of whack. I don't want to go through life with a head full of bad economics! Best to you, jsh --- John Perich [EMAIL PROTECTED] wrote: Well, I made the comment originally because, in the neoclassical framework, would one have any reason to assume that any given cost WASN'T included in the final price? -JP From: john hull [EMAIL PROTECTED] Reply-To: [EMAIL PROTECTED] To: [EMAIL PROTECTED] Subject: Re: In Praise of Pay Toilets Date: Tue, 28 May 2002 17:20:34 -0700 (PDT) John Perich wrote: Why do you assume the cost of bathroom maintenance isn't already included in the price charged? I hadn't thought about it. I guess I had assumed, perhaps incorrectly, that bathroom maintenance costs would be idependent of the prices charged for goods at the establishment. Thus bathroom maintenance costs would not bear on optimizing decisions, in much the same way that lump-sum taxes are non-disortionary. On reflection it has occured to me that prices may affect bathroom maintenance costs: if Mc.D's charges less for burgers and obtains more customers, then they may have more bathroom use which may require more bathroom cleaning, i.e. an increase in bathroom maintenance costs. If such were the case (it seems reasonable), then maintenance costs would enter into the profit max. problem and would therefore affect the price, right? That's not a rhetorical question; if I'm wrong please tell me. Well--I think that was what I was thinking anyway: that bathroom use would be independent of the price. Of course Michael Etchison may be right as well (if I read him correctly), in that firms engage in hueristic pricing and just toss bathroom maintenance into the mix. (If I read you wrong, Mr. Etchison, I apologize for that.) That possibility just never crossed my mind. -jsh = ...for no one admits that he incurs an obligation to another merely because that other has done him no wrong. -Machiavelli, Discourses on Livy, Discourse 16. __ Do You Yahoo!? Yahoo! - Official partner of 2002 FIFA World Cup http://fifaworldcup.yahoo.com _ Send and receive Hotmail on your mobile device: http://mobile.msn.com __ Do You Yahoo!? Yahoo! - Official partner of 2002 FIFA World Cup http://fifaworldcup.yahoo.com
Re: Copy Protection of CDs
Some time ago Mark Wilson sent in an email on copy protection harming hardware. Apparently a felt tip pen can foil that. http://www.cnn.com/2002/TECH/industry/05/21/bc.media.cd.piracy.reut.reut /index.html?related Mitch - Original Message - From: Mark Wilson [EMAIL PROTECTED] Date: Monday, May 13, 2002 5:26 pm Subject: Copy Protection of CDs Evidently, Copy-protection schemes can actually damage hardware: http://www.silicon.com/bin/bladerunner? 30REQEVENT=REQAUTH=2104614001REQSUB=REQINT1=53255 That record companies think this is a solution is laughable. Okay, so a CD won't play in my computer and I can't 'rip' it and encode into MP3. Does this prevent the technologically savvy from sending the digital signal from their standalone CD player into their soundcard and encoding it this way, and then, of course, distributing to the non-savvy crowd? So..the record company has achieved nothing as far as preventing piracy, but has diminished the value of their product by not allowing it to be played on a computer, and left themselves open to potential lawsuits from damaged hardware, and possibly from Philips, who owns the CD patent, and is none too happy about this... Mark Wilson Appalachian State University
Re: In Praise of Pay Toilets
- Original Message - From: john hull [EMAIL PROTECTED] On reflection it has occured to me that prices may affect bathroom maintenance costs: if Mc.D's charges less for burgers and obtains more customers, then they may have more bathroom use which may require more bathroom cleaning, i.e. an increase in bathroom maintenance costs. If such were the case (it seems reasonable), then maintenance costs would enter into the profit max. problem and would therefore affect the price, right? That's not a rhetorical question; if I'm wrong please tell me. Do you include water usage in maintenance costs? Are pay toilets more common in areas of water scarcity? Are costs of water higher in Holland or Spain? Is there any strictly economic rationale that would account for pay toilets being common in some countries and rare in others? Or is the assumption here that businessmen in some countries prefer policies which are economically irrational? How would either a businessman a priori or an economist after the fact go about estimating or determining which policy was more profitable? ~Alypius Skinner
