Budget products

If you were to believe what price theory posits, then prices are supposed to be a signal, typically of quality/ value. However, anecdotal evidence and consumer surveys will tell everyone that, price theory does not hold up in numerous circumstances. The actual determination of price tends to be more complicated than in the usual Econ 101 or whichever classes. What these classes inform us of, are the types of considerations which are typically made when firms set prices, and how market forces impact equilibrium prices. However, the biggest simplifying assumption the intro level classes make is: perfect information - it happens to be one of the most unrealistic and infeasible assumptions.

The majority of markets realistically operate within the market frictions/ asymmetric information setting. However, because of it's complexity, laymen are rendered confused. They shouldn't feel bad because depending on the context, even experts are confused from time to time. And perhaps the confusion is where the frustration and arguments stem from - I suppose they are valid emotional responses.

However, what I have noticed in the United States, is an aggressive use of dynamic pricing, especially when it comes to consumer non-essentials. Therefore, from a consumer perspective, it can be confusing on what is the true price (and thus, indirectly, value) of a product/ service. Due to the periodic discounting, consumers will likely estimate the price/indirect value downwards.

Given this setting, I am going to talk about budget/ discount stores. These types of stores exist for various products: food, clothes, other types of durable goods. Depending on the community, there might be certain cultural norms about shopping at discount stores, specifically, it might be seen in a bad light. I think we as a society should unlearn such toxic attitudes, and maybe we should look beyond just aiming to spend our money on what society has decreed elite establishments. Does it matter if person 1 goes to a pricey mall and buys a good (because they are willing to pay for it at that price), while person 2 goes to a discount store to buy the same good? It is the same good, sold at two different prices for various reasons. It might not exactly be dynamic pricing, but it essentially does the same thing. The point is, person 1 and 2 are able to enjoy the same good.

Especially given the affordability crisis, we should let go of these norms and opinions people hold. These are the small things we can do as a society, to reduce stress and frustration surrounding budgetary constraints. If you have the time to shop at different stores because you are able to live within your budget, there is no shame in being money conscience. Of course, the other issue is that convenience is a factor which tends to increase price. However, the tradeoff then should be about time vs money, as opposed to showing-off vs coming off as a budget customer.