business news in context, analysis with attitude

The Upshot column in the New York Times over the weekend looked at the subject of dynamic pricing, or adjusting prices up whenever demand seems high. The story notes that University of Chicago economist Richard H. Thaler has just won a Nobel prize in economics based in part on a recent study suggesting that “the simplistic Economics 101 version of how markets work - in which a seller raises prices however much it takes to match demand - can be inefficient, or offend people’s moral sensibilities, or both.

Thaler’s basic position in this: “A good rule of thumb is we shouldn’t impose a set of rules that will create moral outrage, even if that moral outrage seems stupid to economists.”

You can read the story here.
KC's View:
Thaler tells the Times that it is a pretty good rule - in life and in economics - that “if you treat people in a way they think is unfair, then it will come back and bite you.”

That’s pretty good life and business advice.