Post
Topic
Board Economics
Re: Inflation overpowers the value of money
by
Porfirii
on 03/08/2023, 19:52:43 UTC
In my country, some people talk about the "inflation of the excuses": Ukraine is at war? let's increase the price of everything; people keeps buying? let's keep increasing them.

I would add a new reason to the list: the negotiation power of consumers against big companies is decreasing exponentially due to modern metrics. For example, big food chains can calculate with great precision the price consumers are willing to pay for a given product thanks to, for instance, fidelity cards (not to talk about the effect of increasingly sophisticated marketing tactics). We all know what happens in any negotiation when a party has more information than the other.

In addition, I recently read that it is easier to address the 20% of heaviest buyers who purchase the 80% of the goods than all of them. So, it doesn't really matter if you don't buy because something seems to expensive to you: even if seven more people did the same, it would still be profitable for the big company and won't lower the price, until you realise that if you ever want that item you'll have to pay the excessive price they ask for it.