Comments on: The Pricing Politburo Slams Shampoo

By: L

Thu, 02 Jun 2011 17:54:13 +0000

I am in the Old City of Jerusalem for a few days and there are two shops next to each other selling ice cream treats. For the same watermelon popsicle (I highly recommend it if youre ever in Israel), one store had it at 7 shekels. The adjacent store had it for 5.5 shekels.

By: Shay

Shay — Sat, 14 May 2011 19:20:48 +0000

What about the market for $0.99 (and not $1.00 or $0.98) shampoos? They have that market cornered! Walgreens apparently wants a monopoly on the $0.77 shampoo. Better warm up the legal machines.

By: Freedom Fighter

Freedom Fighter — Sat, 14 May 2011 13:13:20 +0000

The purchase dynamics might not be the same at the grocery store than they are at the drug store. It might be fine to sell your shampoo higher at the grocery store because people might buy out of impulse but you sell it cheaper at the drug store because people there are more conscionable and take the time to buy value.

Drug store vs grocery store is definitely not the same market, even if they are 10 feet apart physically, they can be light years apart psychologically.

That’s why you will never see a corner restaurant sell hotdogs at $8.00 a piece nor beer at $9.00 a glass but you will see such prices at a sporting event. It’s definitely not the same market.

By: Freedom Fighter

Freedom Fighter — Sat, 14 May 2011 13:09:14 +0000

That was funny, LOL

But phosphate is just a scrubber, not an emulsifier. You still need soap to cut through the grease. Once the grease and grit is cut, the phosphate carries it away. Phosphate is the chemical equivalent of an abrasive, you still need the soap and the shampoo.

By: Freedom Fighter

Freedom Fighter — Sat, 14 May 2011 13:05:43 +0000

There is no trying. The government is definitely micromanaging prices.
When it cannot dictate the price directly, it sets prices floors and price ceilings.
Sometimes it’s politically motivated, like setting price ceilings in the face of rampant high gasoline prices, but sometimes it’s petty bureaucracy in this case of shampoo prices.

Anyways, tempering with prices lead to shortages and malinvestments.

By: Freedom Fighter

Freedom Fighter — Sat, 14 May 2011 13:01:42 +0000

Shhhh, don’t spill the beans.

By: James Moore

James Moore — Sat, 14 May 2011 08:47:33 +0000

They might control about 90% of the market? Hogwash! What about all of the $1 store brands. And how do you justify defining a “market” with a 77% price differential? Justice doesn’t provide a comprehensive survey showing pricing clusters. It may be that $1 and $1.77 products are in completely different markets.

By: jmorris84

jmorris84 — Sat, 14 May 2011 03:58:33 +0000

LOLLLLLLL!!!!!!!!!!!!!!

By: Seattle

Seattle — Sat, 14 May 2011 02:21:35 +0000

why not chewing gun while we’re at it.

Well, that’s one way to solve the problem…

By: clever-title

clever-title — Sat, 14 May 2011 01:02:33 +0000

Perhaps the DOJ should start an investigation of corporate Antitrust attorneys. They seem to be acting in collusion to restrict the market for comptent representation.

By: Jim P.

Jim P. — Fri, 13 May 2011 23:58:01 +0000

What’s the big deal? I just use a tablespoon of phosphate in the shower.

By: Eric

Eric — Fri, 13 May 2011 23:19:30 +0000

I wonder if they know I can buy a big jug of “horse” shampoo for $1 at the local dollar store – which is about 4 times the size of normal shampoo containers. I use it as a form of liquid soap, since I’m too lazy to lather up with a bar of soap. It does contain some fine print saying it’s safe for humans.

I hope this loophole continues to exist and stay under the radar of the regulators. Perhaps they might fear I’d grow a mane and have an urge to whinny.

By: Bill

Bill — Fri, 13 May 2011 20:09:55 +0000

So, do you think that the government IS or ISN’T trying to micromanage prices?

By: Freedom Fighter

Freedom Fighter — Fri, 13 May 2011 18:48:27 +0000

It’s quite ridiculous and quite silly for the government to regulate the price of shampoo, why not chewing gun while we’re at it.

But such silly examples are a good way to demonstrate the absurdity of price control. If it’s absurd to control the price of shampoo, then it should strike the readers that it is equally absurd to control the price of oil or certain foods.

The current increase in the price of oil and gasoline is prompting certain governments to implement price controls and price ceilings. Most people, statists, socialists, liberals and other economic illiterates will accept such moves as being necessary to help the people. But really, controlling the price of gasoline is no less silly than controlling the price of shampoo.

What price controls will do, especially price ceilings is to make the commodity even more scarce. Any state that will implement gasoline price ceilings will experience periodic gasoline shortages and long waiting lines at the gas pump, it will exacerbate problems and people with money and willing to pay more for their gasoline will end up having to wait and do without.

By: Bill

Bill — Fri, 13 May 2011 18:36:00 +0000

A drop of 3 cents may not seem like a lot to you but, in the last weeks, the US$ fell by nearly 9 cents against the Euro. So, in the same way that gas prices are up and down like a whore’s nightie (well, mostly up, I guess, these days, seeing that everyone wants a piece of us), your toilet paper actually fell by more like 6%.

By: Bill

Bill — Fri, 13 May 2011 18:22:58 +0000

The DoJ should be effective under this leadership? Never, this comes under the heading of the president’s “creating jobs” program and it’s better than teaching as far as job security goes – by defining your own target market you create the perfect perpetuum mobile without having to deal with raucous kids whose parents, now, probably work for the government, anyway.

By: JP

JP — Fri, 13 May 2011 17:54:18 +0000

What if one of the companies would have raised their prices once the merger was challenged. They could have raised them just enough to exit the “value shampoo market”, and enter the more general shampoo market. I realize that this is unecessary posturing, that still does divert resources away from production, but I do love it when the better minds in private industry find a way to out manuver the government idiots. It always makes me laugh.

By: Shay

Shay — Fri, 13 May 2011 17:46:33 +0000

I at first disagreed with you, but remembered that in my local supermarket I’ve recently seen several “markdown” tags on things where the price has literally gone down three cents. The most recent I remember was a 12-pack toilet paper going from $5.25 to $5.22, with a “new lower price” tag.

By: J. Murray

J. Murray — Fri, 13 May 2011 17:27:16 +0000

Take it another step and each person is a separate market. How dare Procter & Gamble enjoy a monpoly control over my shower with Head&Shoulders brand shampoo? When will the DoJ bust up this monopoly?

By: Bill

Bill — Fri, 13 May 2011 17:17:46 +0000

The anti-trust people really missed an opportunity. If, as the article points out, they are allowed to define the market, then each individual brand could be a separate market – the mind boggles!

Who empowers these people? Who sets their targets and lauds their achievements? Are they insane, or is that an aid rather than a requirement?