Why We Overpay and How It Leads To Income Inequality
Money For the Rest of Us
J. David Stein
4.5 • 1.4K Ratings
🗓️ 19 September 2018
⏱️ 35 minutes
🧾️ Download transcript
Summary
#222 How asymmetric information, price discrimination and the stories we tell ourselves contribute to artificial profits and income inequality. Thanks to CNote for sponsoring today's episode.
For show notes and more information on this episode click here.
- [0:20] Rents, overpayments, and income inequality are all side effects of market distortions
- [8:55] Value-based pricing vs pricing based solely on cost
- [17:13] Pricing is inextricably tied to the stories we tell about ourselves and to others
- [22:30] Consumers need to consider these 4 things when evaluating the cost of goods and services
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Transcript
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| 0:00.0 | Welcome to Money for the rest of us. |
| 0:03.2 | This is a personal finance show. |
| 0:04.6 | It's on Money. |
| 0:05.8 | How it works. |
| 0:06.8 | How to Invest It and how to live without worrying about it. |
| 0:09.4 | I'm your host David Stein today as episode 222. It's titled, Why We Overpay and how it increases income |
| 0:18.0 | inequality. |
| 0:20.6 | If you go on Amazon.comcom you can buy a 12 pack of 12 ounce cans of Coca-Cola for $4.68. |
| 0:33.8 | Or you could go to Walmart and buy Sam's COLA, a 12 pack for $2.68. $2.68.2 more for Coke. |
| 0:47.3 | Is that $2 of advertising that Coca-Cola does? |
| 0:54.6 | There's an article in Investopedia |
| 0:56.2 | where they estimate that Coca-Cola spent 7% |
| 1:01.6 | of revenue on advertising. |
| 1:05.8 | So the $2 can't just be advertising. |
| 1:09.8 | What is it? Koch's cost can't be higher in terms of producing the product, it's just sugar water. |
| 1:18.0 | How can they charge? |
| 1:21.0 | Two dollars more than Sam's. Why do we over pay for Coca-Cola? |
| 1:30.0 | I read a fascinating book Monday. |
| 1:33.0 | I'm not done yet, but I still want to talk about it. |
| 1:37.0 | It's by Jarrett, the Jist, he is a Belgian legal scholar and writer he specializes in contract law, law and economics and |
| 1:48.8 | comparative law. |
| 1:50.9 | The book is titled Rentz. How marketing causes inequality. Rent is an economic term. |
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