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Today was ... interesting. If you followed me for the past months over on the shitbird site, you might have seen a bunch of angry German words, lots of graphs, and the occassional news paper, radio, or TV snippet with yours truely. Let me explain.

In Austria, inflation is way above the EU average. There's no end in sight. This is especially true for basic needs like energy and food.

Our government stated in May that they'd build a food price database together with the big grocery chains. But..

in reply to Mario Zechner

the responsible minister claimed it's an immense task and will take til autumn. It will only include 16 product categories (think flour, milk,etc.). And it will only be updated once a week.

Given how Austria works, some corp close to the minister would have gotten the contract for a million on two to create a POS just enough so the minister can say "look, I did something!"

Well. I heard that and build a prototype for all products of the two biggest chains in 2 hours. The media picked it up...

reshared this

in reply to Mario Zechner

Here's a selection of media coverage of the entire thing.

https://heisse-preise.io/media.html

It spread like wild fire and made the minister look like an idiot.

I took the thing down in fear of retaliation by the grocery chains. My plan: get a big NGO, news outlet or political party to host the thing and be a legal shield for the endevour.

Almost every NGO, media outlet and political party got in contzct with me (not the other way around). There were lots of promises and big words but zero action.

in reply to Mario Zechner

All these orgs only had their self-interest in mind. After two weeks of this bullshit, I figured I might as well gamble and put this thing up in my own name.

Surely the grocery chains won't sue me. The bad PR would easily outweigh whatever little inckme loss they'd suffer from a few hundred people using the site to find the cheapest product.

You see, I'm basically just crawling the stores online stores. Most of them have an API. I then normalize the data across the stores, and expose it.

in reply to Mario Zechner

The whole thing runs client-site. The server fetches the latest data from the stores once a day. All data fits into 5mb of gzipped JSON. Small enough for the client to do anything. The server just serves 8 static files. It can handle serve all of Austria easily and could be scaled trivially. It's just static files.

Being the idiot I am, I also made it open-source:
https://github.com/badlogic/heissepreise

And as usual, people flocked to it and contributed. In no time we had all stores in Austria in there.

This entry was edited (1 year ago)
in reply to Mario Zechner

Then we also got German and Slovenian stores. Then we normalized product categories across stores and added some light data science techniques to match the same or similar products across stores to make prices more easily comparable. You know, iterative improvements.

And then some anomymous guy in Twitter send me the data he crawled for the two biggest chains. Starting in 2017. And that's when thinga really got interesting...

Cory Doctorow reshared this.

in reply to Mario Zechner

I scrambled to integrate his data into my platform. I added analytics tools. And then I ran my first few analyses. And my jaw dropped.

"Well, that's a bit to much of a price increase even given higher energy prices."

So I started to dig. And boy did I find a lot of things...

reshared this

in reply to Mario Zechner

My first analysis actually happened before I build the platform. I was manually comparing prices of products the stores themselves offer in the lowest price segment. Things like grocer store brand milk or flour.

I compared 40 product pairs across the two biggest chains. And lo and behold: their prices matched exactly to the cent!

An NGO picked this up on Twitter and did the analysis for 600 product pairs. Same picture.

With my platform in place, I could do more advanced stuff.

Cory Doctorow reshared this.

in reply to Mario Zechner

E.g. given the historical data, I could see price movements for a product across the two chains. And you won't believe what I found (well, you know what's coming...)

Them fine grocery chains changed the prices of the self-branded low cost products with one to two days, or even on the same day. And they both came up with the exact same price.

Cory Doctorow reshared this.

in reply to Mario Zechner

This wasn't only happening in the low-price chain-brand segment. It also happened in the mid-range segment of self-branded goods.

And it all started happening when inflation went through the roof.

Clearly, something was up. My guess was: tacit collusion, meaning, oligopolic price coordination without explicit coordination.

Meanwhile, others have build platforms like I did as well. And they too saw these patterns.

There were more.

Cory Doctorow reshared this.

in reply to Mario Zechner

We could show shrinkflation, meaning products with less content are sold for the same or even higher price.

Examplified by e.g. laundry detergent.

Cory Doctorow reshared this.

in reply to Mario Zechner

We could also show that the exact same product cost up to 40% less in Germany, a country with higher mean income and higher cost of living.

Cory Doctorow reshared this.

in reply to Mario Zechner

Even more interestingly, products exclusively produced in Austria cost less outside of Austria.

Billa is the Austrian version of REWEDE.

Even fucking Red Bull, an Austrian brand, costs more in Austria when it is discounted here, than it costs normally without discount in Germany.

WTF.

Cory Doctorow reshared this.

in reply to Mario Zechner

Then I looked at an aspect pretty unique to Austria: discounts.

You see, in a normal country, with a competitive grocery market, you usually have about 10%-20% of products that get discounted on average.

In Austria, that rate is 40%. It's a fantastic way to obfuscate the actual price of a product. As a customer, you'll never know what you'll pay on that day until you see the current discounts directly in the store.

The chains are very generous and will send you discount leaflets via mail.

Cory Doctorow reshared this.

in reply to Mario Zechner

If I were trying to describe it in more flowerly terms: It's asymmetric information war fare.

The stores tell you they are good and benevolent and only have your interest at heart, so here are discounts. Discounts for everyone. They even gamified the whole thing with stickers. I shit you not. People collect stickers they put on the products in the convery belt at the register. There's also apps, which will give them all info on you

In reality it makes it impossible to know how much things cost

reshared this

in reply to Mario Zechner

The grocery chains got a little iffy about all that somewhat negative media coverage, some of which was spurred by my continued analyses.

They started to put out these things in the store. It basically says "We've already lowered the prices of 450 products for you this year". With a sortiment of 22000.

They were also dumb enough to put out a machine readable PDF with all the products they lowered the price for.

With a little data science magic, I was able to match those with my database...

in reply to Mario Zechner

The spot check showed that their claims were true on the surface.

But I'm a stickler for data, so I looked a bit closer.

in reply to Mario Zechner

And lo and behold. There was fun to be had.

There are products that are cyclic in their price changes. E.g. this axe shower gel, which they listed as having a lower price now.

Yeah, you lowered the price from 3.99 to 2.99. But that follows the exact pattern this product's price had over the last couple of years.

Technically correct. But not a permanent price decrease.

Second picture is another example of that.

Cory Doctorow reshared this.

in reply to Mario Zechner

But there's a more "nefarious" kind of price decrease.

As I said, Austria is a country of insane amounts of cyclic discounts. Many products will be sold for their "regular" price for one week and a discount price the other.

The real price for the consumer is the average of the regular and discounted price.

Given this knowledge, do you notice something with the prices for this product the grocery chain claims to have decreased the regular price on?

Cory Doctorow reshared this.

in reply to Mario Zechner

Of course you do, cause you are a smart cookie.

While their claim that they decreased the regular price is correct, they also increased the discounted price that comes into play every other X weeks/days.

So they are again technically correct: the regular price was decreased.

But on average, a consumer pays more if they buy the product every week, as the discounted price has been increased. The average is higher than before.

Sneaky.

Cory Doctorow reshared this.

in reply to Mario Zechner

All that media coverage of my platform and the platforms of other people, with whom I've started to converse and who've became friends of sorts, triggered the competition authority of Austria.

You know, the guys and gals who's job it is to sniff out anti-competitive behaviour, cartels, price gauging and coordination and so on.

They contacted all of us to ask what we'd need to continue doing our work. They actually saw value in that.

We provided them with a shit ton of feedback.

Cory Doctorow reshared this.

in reply to Mario Zechner

The basic gist of that feedback:
- Legal: it must be legal for us to crawl and publish the price data the stores put out on the web in their online stores
- Technical: ideally, stores would be forced to put that data out in a normalized form, so matching and comparisons become easier. We already did that ourselves though, with some data science and heuristics, so no biggie if that doesn't happen.

Besides that feedback, I also send them a shitton of data and patterns I found.

Cory Doctorow reshared this.

in reply to Mario Zechner

I'm but a lowly computer nerd and lay person, and not someone with an economics degree. I simply handed the data over in the hopes their experts would figure this shit out.

Well. Today they presented their first preliminary report.

In it, they basically copied my long ass email with answers to their questions from earlier more or less verbatim. They agreed with my conclusions regarding what needs to be done on the legal and technical site.

Cory Doctorow reshared this.

in reply to Mario Zechner

And they also officially said it's very likely the grocery chains use automated systems to follow each other in prices.

No word on the other data. We'll find out what they think end of October when the full report is scheduled to be released.

Now, here's how the chain of command works in this sector.

The competition authority is apolitical but under the reign of the politically appointed minister of economics. They can only report and suggest to him.

He then decides what gets done.

Cory Doctorow reshared this.

in reply to Mario Zechner

The suggestion by the competition authority to the minister was great:

1. Using the data should be made legal by the legislature for certain parties, including price comparison platforms and academic institutions.
2. Grocery chains of a certain size must publish all their data in real-time according to a predefined scheme with all necessary meta data to make things comparable and allow matching of products across stores.

Fantastic! Or so I thought.

Cory Doctorow reshared this.

in reply to Mario Zechner

Remember the chain of command. The minister decides what actually gets done.

And that minister is a member of the conservative party. You can already guess what gets done, right?

His plan:
1. The grocery chains must publish data. But only for a hand-picked list of basic products. Not the entire sortiment, like we do now.
2. Platform owners can be sanctioned/sued if they display the data the wrong way.

There's are only two up-sides in all of this.

in reply to Mario Zechner

First of all, the minister initially planned to create a price comparison platform "himself". This would have meant that some company he's buddy buddy with would have gotten a million Euro contract and delivered an abmysal failure of a system.

He's now given up on that.

The second upside: as soon as media coverage of our efforts picked up, the price hikes stopped for the most part. I'm obviously not entirely attributing this to our work. But I like to think we played a part in it.

in reply to Mario Zechner

And that was my story. Thank you for coming to my TED talk. And don't spend your holiday money in Austria, we suck.
in reply to Mario Zechner

I don't have a sound cloud, but I have another little project.

https://cards-for-ukraine.at/

We have a charity where we ask for donations which we convert into €50 grocery vouchers for Ukrainian families that fled to Austria. Our state fails them as well.

We are zero overhead, every cent goes towards the vouchers. We pay the rest (envelops, stamps, printer cartridges, etc.)

We are 100% transparent, all contracts/orders/bills/payments here:

https://drive.google.com/drive/folders/1PxOL8A44bIRU1Hdoq87_2iXSLNmnMXQr?usp=drive_link

Bunch of friends doing stuff.

reshared this

in reply to Mario Zechner

Yeah, the irony of sending grocery vouchers for the same grocery stores that I go up against with my platform is not lost on me.

Anyways, we've been able to send out ~4500 vouchers in a bit over a year to as many families. That's about €220,000 worth of donations.

~6000 families have signed up with us, about 1500 are still waiting for a voucher.

If you can spare some money, here you go:
https://cards-for-ukraine.at/donate

The latest batch went out today. CW link to shitbird site

https://twitter.com/badlogicgames/status/1702670312981049561

in reply to Mario Zechner

Oh, and if you want to do this for your own country, you can re-use what we build so far!

https://github.com/badlogic/heissepreise

Happy to help if you need guidance! Adding a store is usually less than 200 LOC if they have a search API in their web store.

https://github.com/badlogic/heissepreise/blob/main/stores/billa.js

in reply to Mario Zechner

interesting thing about Egypt…
We have an app called Instashop, it's a grocery ordering app, but they don't have their own stock, instead they let you search for nearby stores and see their catalog and passes the order to them.
Not just that, they've also normalized products across stores so you can search by product and see where it's available and its price.
The app also works for local pharmacies (most things are over-the-counter here) and bakeries and more.
https://instashop.com
in reply to Mario Zechner

thank you so much. This is soo cool and inspiring 👏
in reply to Mario Zechner

(No the code isn't great, and I should have used TypeScript. I didn't plan for this to become a thing. I'm sorry)
in reply to Mario Zechner

This is amazing. Reading this gave me a little hope that tech can still be used for good. Thank you for everything you've done.
in reply to Mario Zechner

Wow .. what a read. Do you know about Project Galileo to help you out protecting the site/servers/... ?

https://www.cloudflare.com/galileo/

in reply to Kristof :nvadmin:

no need for protection. The thing is easily self-hosted. Can even deploy it as a GitHub site, with a daily workflow run scraping the data.
in reply to Kristof :nvadmin:

@iworx the repurcissions would come in form of a law suit, in which case hosting would be the least of my problems :)
in reply to Mario Zechner

you have absolutely no reason to apologize. You did the work. You potentially changed the lives of thousands or even millions of people for the better.

You did good and you deserve nothing but praise, regardless of code quality.

BRB, forking it to rewrite in typescript. ;)

in reply to Mario Zechner

Your whole story is amazing. Everyone should read this!

If I can do just a fraction of what you have done for your fellow humans, I'll feel that I've lived a useful life. That's the aim. :)

in reply to Mario Zechner

Wow, amazing work! This needs to propagate globally. Imagine seeing what patterns of greed and engineered poverty occur on global analytics...
in reply to Diabetic Heihachi

Might help piss enough people off to actually make a difference.
in reply to Diabetic Heihachi

@DavBot I'm all for that. That's why this is OSS and easy to self-host. Adding a new store is usually less than 200 LOC (code quality is terrible tho :D)

https://github.com/badlogic/heissepreise

in reply to Mario Zechner

Don't underestimate the power of filing issues against your own github for areas of the code that you think would benefit the most from getting cleaned up. That'll help contributors focus their efforts.
in reply to Mario Zechner

@DavBot well i bet my inflation affected 2 german cents that rewe (and others) are doing the exact same thing here in germany and anywhere else
in reply to Mario Zechner

don’t worry about not using the hip language of the day: there’s beauty in having a quick prototype that is good enough to solve a huge societal problem.
in reply to Mario Zechner

this is genius, thanks verry much. My latest coding was in the '90 but this is the final trigger to get me on to json. Your writing skills are brilliant + hilarious. Still love some Austrian' s btw
in reply to Mario Zechner

would you recommend other countries add stores to your codebase through a PR, or should it be a fork and entirely seperate system? I suppose ideally it could all be in one place to aggregate resources and minimise the setup costs
in reply to 🌈 Andrew ☄️

@bnut honestly not sure. I think for now it's best to fork then send a PR for the README with a link to the country specific fork.
in reply to Mario Zechner

cool, thanks. Do you have a preferred library for i18n? I don’t really do web dev, but thought allowing it to be translated might be useful for further adoption
in reply to Mario Zechner

the Swiss and Austrians have a lot in common with cartels and price fixing on food and other items. Sadly.
in reply to Mario Zechner

Thank you for doing all that work. You helped a lot of people.
in reply to Mario Zechner

I was reading the whole thing hoping against better knowledge that it will have a good ending ...
in reply to Mario Zechner

But from lived experience: The grass seems greener on the other side. E.g. Housing inflation being through the roof (ha!) here in Ireland. Toothless regulations with price increase limits - which GASP are not checked and surprise surprise are not working. etc - but moving back will most likely not be an option with the coming disaster of the 2024 election
in reply to Richard Kogelnig

@RichardKogelnig oh, I'm under no illusion that it's "better" anywhere else. All things considered, Austria is still a pretty good place for someone with my background. As long as I don't follow Austrian politics that is...
in reply to Mario Zechner

Thanks for your incredible job.

I wish more people where educated to act like you! You are doing such an important job!

Keep it up, you have all my support!

in reply to Mario Zechner

wow, Austria really is the Canada to Germany’s USA.
in reply to Mario Zechner

What an amazing story! Thanks for sharing. I wish someone with the skills would do this for US stores to demonstrate what is really happening to ordinary people in the US economy.
in reply to Mario Zechner

First tech thread that I understood easily, thank you for the good explanations! And: woah! 🔥
in reply to Mario Zechner

I wonder if one source of the collusion is from the suppliers to the grocery stores? Ie presumably they aren’t each buying directly from every manufacturer or contracting directly with their own factories for store brands. Instead I would assume there are a handful of larger distributors and larger white-label companies that make most of the grocery store house brands (in the US at least these are sometimes rumored to be the same companies that make some big brands)
in reply to Shannon Clark

@Rycaut exactly right, that is one source in play here. Funnily enough, many of these producers also sell their own "high-end" products right next to the store-branded supposedly lower end products. Often, the quality is the same though. Let's the, serve different price segments, with the stores getting a cut on the lower end.
in reply to Mario Zechner

look at my old employer Quotient (formerly coupons.com) not sure how much of the data they make available but one of the products I worked on for them touches the majority of grocery stores in the US at every point of sale transaction (delivering digital coupons for their customer based on the items in the transaction). The scale was insane (and this was years ago - I assume the scale has grown considerably since I was there) but normalizing PoS receipts is quite complex
in reply to Mario Zechner

https://mastodon.gamedev.place/@badlogic/111071710471971197

This is a long and interesting thread worth reading.

Great work that @badlogic@mastodon.gamedev.place did. And not enough by itself he's using it to advertise a good cause he's working for, helping people who had to flee from there homes.

What a shame for our democracies that a guy like this needs to waste a single **thought about being sued **for analyzing public available data.


And that was my story. Thank you for coming to my TED talk. And don't spend your holiday money in Austria, we suck.

in reply to Mario Zechner

Thank you for sharing this great story!

I would love to host one talk about it at @fosdem conference in the room I co-organize about Open Research @FosdemResearch in Brussels Feb the 3rd 2024 or online Feb the 10th 2024.

We organize this session to discuss how research (of any kind: acamedic, activism...) is shaped by #FLOSS or #opendata development or use.

Please consider joining us and feel free to contact me if needed.

All details here: https://research-fosdem.github.io/

in reply to Mario Zechner

also in the US there is a rather nefarious pricing scheme that happens at some big stores - where prices for the same products vary from physical store to physical store of the same chain. (And prices for many products will differ when priced for delivery whether same day or by mail from the in store prices. Which makes looking at their websites or apps for prices even less reliable.

(And some companies do things like send you a discount if you merely open their website once)

in reply to Mario Zechner

Now we know why the grocery stores have an API. They want each other to know when they’re changing prices. What the Minister decides is irrelevant.
in reply to Mario Zechner

not sure if they are automated - but, I worked for billa in Marketing until 2022, and if we had a discounted price and the sales person found out it was cheaper than Hofer, spar, etc. we automatically matched it to be their prices because they didn't want to be cheaper but wanted the exact same price???
in reply to Mario Zechner

After living here for 7 years and counting I’ve observed that even the ostensibly apolitical is political. Way too much of that small town “favours for your friends” stuff going on even in central government and the very Blues Brothers idea that “balance” equals “We have board members from both parties, the ÖVP *and* the FPÖ!”.
in reply to Mike Knell

and on the other side there’s Vienna being run as the personal fiefdom of the SPÖ thanks to the extra power that comes from
the dual-role mayor/Landeshauptmann thing which the other parties hate but only because they want it to be *their* personal fiefdom instead.
in reply to Mike Knell

jupp that's fucked up too. See Energie Wien and rent prices.
in reply to Mario Zechner

The ORF Stiftungsrat is probably the worst example. I don't think I've seen a less politically independent governing body in charge of overseeing and supporting the independence of a public service broadcaster outside of an actual dictatorship (eg. Florida). People in government are simply incapable of *not* giving jobs to their political mates. The corruption and the favours are expected and the public just shrugs and lectures foreigners like me to keep our noses out as 'this is how we do things in Austria". :)
in reply to Mario Zechner

did you see the report by the IMF (yes, the Internationale Währungsfond) that half the inflation was caused by company profits? https://www.draketo.de/politik/kommentare#inflation-unternehmensgewinne-iwf
https://www.imf.org/en/Blogs/Articles/2023/06/26/europes-inflation-outlook-depends-on-how-corporate-profits-absorb-wage-gains

It’s crazy that that story didn’t already get people riled up, but it seems they have to see *how* it happens and get a news anchor (2 hours vs. 2 months) to find it, and you showed that beautifully!

in reply to Mario Zechner

I’m blown away by this. Outstanding work!
This entry was edited (1 year ago)
in reply to Bernd Kilga

@console watching prices at lidl i had a similar impression. now we know it's fact :-)
in reply to Mario Zechner

no it's not ideal to force stores to do something. there's no market failure there.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup information asymmetry is a very basic market failure, from an orthodox neoliberal perspective. perfect information is an assumption of market efficiency.
in reply to interfluidity

@interfluidity @badlogic@mastodon.gamedev. the only relevant information for a consumer here would be the prices, which are perfectly transparent.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup The prices are only transparent at the point of sale, and there are tremendous frictions to aggregating them across the market and over time. Price transparency, and only price transparency, is precisely what the proposal would "force".
in reply to interfluidity

@interfluidity That's just a bizarre use of government regulation when we have more information than we've ever had and you could easily create a website to track this stuff.

also a grocery chain that had superior price transparency could already have a competitive advantage so I still don't see a market failure.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup That's... not neoliberal. Perfect information is an assumption of the models. There are not well supported models under which superior transparency is a reliable competitive advantage.

The author of the original thread literally did create a platform to track this stuff. What he wants to "force" is publication of that information online so that chains can't obfuscate/opt their way out of it.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity as I was typing this I saw an alert from the grocery store order my wife just placed. we buy our groceries online and can either go pick them up or have them delivered for a yearly fee of $100, as long as the orders are over $30 a piece. this is better price transparency than we have had in the history of humanity.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup convenient information from a store is not price transparency. price transparency means that consumers know all the prices across the market so they can choose among competing suppliers.

i'm glad your store offers you convenient options and tells you the prices they will charge for them! but having the price at the point of sale is very far from price transparency. (it's astonishing we have markets — e.g. health care — where we don't even have that!)

in reply to interfluidity

@interfluidity so being able to conveniently compare prices across countless stores from my computer is not transparency?

and creating a website where I show the average price for a basket of identical goods at 5 to 10 local grocers also doesn't count?

hmmm.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup All that the author is asking to "force" is maintaining the technical capacity to create the latter at large grocery chains.

Not much of a coercion by the leviathan, perfectly justifiable on orthodox neoliberal grounds. Prices should be posted. Here's the public space, the inexpensive modality, by which you are to post them.

Not much of a bite by the overweening leviathan.

in reply to interfluidity

@interfluidity we already have every opportunity for price transparency. You could go by the same goods at three different stores and post online how much they cost.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup that is very expensive. and prices can change frequency.

creating those kinds of market frictions is how firms undermine the perfect competition neoliberal models rely upon, discrediting them as a practical matter.

i no longer call myself a neoliberal (i might once have), but if you want to support the cause, this is exactly the sort of intervention you should support, the kind that makes some approximation of perfect competition real.

in reply to interfluidity

@interfluidity oh yes, average prices from store to store vary radically from day to day. sure thing man. let's get some more cookie warnings.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

the thread we're responding to was literally about week-by-week price and sale variation strategies used by grocers. if you wanted to make a good website even for a sizable local market to capture these kinds of strategies by physical visits, it would have to be at least somebody's full-time job. yet it is to a first approximation cost free to publish them in a standard format on the firm's exiting web infrastructure.
This entry was edited (1 year ago)
in reply to interfluidity

@interfluidity I don't see how changing them week by week is going to appreciably change their RELATIVE cost. I live within cycling distance of two different whole foods, a new seasons market, a market of choice, a Fred Meyer...

Fred is always going to be the cheapest of those any week of the year. followed by market of choice followed by new seasons followed by whole foods.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup Walmart famously cultivated a (deserved) reputation for everyday low prices, made its profits by strategically raising prices on subsets of goods, relying on the everyday low profits reputation to draw customers in who would presume these goods would be around best-price when they were not.

Fred Meyer has an opportunity with u to do the same!

Under competitive markets, relative prices certainly wld vary btw stores offering similar quality+services. (WF is a different amenities tier)

in reply to interfluidity

@interfluidity when it comes to any goods that are more expensive than your everyday groceries, it already pencils out to check out the prices at a few local stores. as I just did when I bought a new magnetic induction oven and television. I do not believe Austria has some kind of magical economic situation that needs special government intervention.
in reply to interfluidity

@interfluidity That's stupid. there's no need for government intervention here. there's not a problem that can't be solved by the market.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup well, we'll disagree but let's be nice about it.

i am not a neoliberal, who thinks markets should be left alone but for narrowly circumscribed failures.

i am more Polanyian these days, i think markets are polymorphic beasts that states must shape and manage to yield prosocial outcomes, and encouraging price transparency (as much with carrots as sticks) in one useful way they can do that.

in reply to interfluidity

@interfluidity That doesn't make sense. utility is roughly equal to log of wealth, so the correct economic policy is that which maximizes the amount of GDP and redistributes as much while as possible without dead weight loss. this is an objective mathematical statement.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup even more deeply than about markets, we disagree about social welfare functions and there inherent dependence on inherently neither objective nor scientific values, and about the use and authority of what purports to be objective science in social affairs.

we've debated that _ad nauseum_ before (a bit here, more on the QSite). i have little interest in picking it up again.

in reply to interfluidity

@interfluidity this is robustly proven via revealed preference experiments. I'm sorry but they're just not a scintilla of evidence supporting your worldview.
in reply to interfluidity

@interfluidity You can't disagree about objective facts.

and you can't merely criticize my utility function, you have to propose an alternative and show how it better fits the data. You couldn't do that to save your life.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

you don't have a utility function. utility is a construct made up as a tool to explain, summarize, and predict behavior. welfare is a normative construct, distinct from but in practice usually informed by peoples' hypotheses about utility. i am criticizing your worldview about social affairs, that your views are informed by an objective science rather than subject to the human vagaries of diverging preferences and values.
This entry was edited (1 year ago)
in reply to interfluidity

@interfluidity of course you have to have a utility function otherwise you have no basis for evaluating which of two policies is superior. You have no basis for having a conversation about policy at all at that point.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup people debated policy long before Bentham coined the notion of "utility". the distinction between utility and welfare i described—utility is positive, a construct deployed to predict and describe—while welfare normative—about prescribing, which inherently depends upon values—is what you would learn in any welfare economics class. my salad is very popular, and its dressing is very orthodox.

(tbf, Bentham used utility normatively, and most of us slip up on the distinction often.)

in reply to interfluidity

@interfluidity Bentham didn't invent utility he discovered it. And I'm sure lots of people discovered it before him and just didn't write books about it. utility demonstrably exists in every action taken by any organism.
in reply to interfluidity

@interfluidity You're deeply confused. values are what is already taken into account in people's individual utilities. The correct way to form a social utility from those personally utilities is just an objective mathematical statement that can be logically analyzed for consistency. amateurs constantly make this mistake..
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity policy isn't about prescribing anything. it's about determining the optimal policy, regardless of whether you prescribe it.

we could discover a new optimal treatment for cancer and not necessarily prescribe it to people. You're confusing two different activities.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i'm using the word "prescribe" in the general sense as advise or recommend. if we thought a cancer treatment was optimal, we'd probably prescribe it in that sense, although maybe under some broader metric (it would cost $1B) it would be less optimal and then we wouldn't.
in reply to interfluidity

@interfluidity this is confused. we already took the price into account when we decided it was optimal. whether to prescribe it is about your personal concern for the welfare of others. whether it is optimal or not is an objective statement. whether to prescribe it or not is about your personal values.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup (not sure how risk preferences fit into our conversation, but have you noticed the revealed preference of many people towards participating in lotteries? would you rather have a 50% chance of $99 or a guarantee of $50, it's unpredictable the answer you will get. especially if you let it be a 1% change of 99 or a guarantee of 1. humans aren't reliably risk-averse. under some circumstances revealed preferences are described by marginally increasing, rather than diminishing, utility!)
in reply to interfluidity

@interfluidity You're talking about a case where there is utility in the game itself, just like people enjoy playing basketball. this is obviously statistically negligible in everyday market behavior like the price you offer when you're trying to buy a house, or how much you want to pay for milk.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup no, it's absolutely not. poorer people reasonably demonstrate increasing marginal utility in a wide variety of activities, because when one is very difficult straits small losses only take you from shit to shit, but the possibility of a large gain would change everything.
in reply to interfluidity

@interfluidity this is explained for by decreasing marginal utility you dolt.

with a concave utility function, a loss of x reduces your utility more than a foregone gain of x. Christ this is basic.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i'm not sure what productive role "you dolt" has in this conversation. i'm a trained economist, fwiw.

the concavity of a utility function is used to express risk preferences. under a concave utility function, keeping $1 is worth more than a 1% chance of earning $100. an agent with concave utility would always turn down a fair lottery, let alone one that pays on $99 for the 1% chance to earn a $100. 1/

in reply to interfluidity

@cshentrup when ppl do play negative-expected-value lotteries (which covers a wide variety of risks) they're revealed preferences are described by convex, rather than concave, utility. in the real world, that's not infrequent.
in reply to interfluidity

@interfluidity No they aren't. You just have an incorrect mental model. they are playing a game where the fun of the game itself has a positive utility. just like I suck at basketball and will usually lose but still enjoy playing it. your mental model is simply defective.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup my friend this is not a game. it explains why people with little to lose become drug dealers, even though the modal outcome is pretty terrible, as much as little lotteries. or, as a financial analogy, holding options renders portfolios "risk-loving" (volatility is good for you), and people in their life portfolios often hold real options that also render them geared to enjoy, rather than dislike, volatility.
in reply to interfluidity

@interfluidity wow, a trained economist who doesn't understand how utility works, and thinks the social utility function is about "values". Good god this is sad.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup my friend, i'd really ask you to talk to other people who are actual economists, particularly from the relevant domain of welfare economics. my treatment of the subject is not unusual.
in reply to interfluidity

@interfluidity I've worked with experts in the field for like 20 years. I co-founded a non-profit based on this policy. I visited Kenneth Arrow at his home and we interviewed him. I'm in a book about this topic. You have made countless classic amateur mistakes just in this thread. You have no idea what you're talking about.

some light reading for you

https://www.rangevoting.org/UtilFoundns

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup you've pointed me to that piece about a million times. we're going to, as we have before, disagree about who has very little idea about what they're talking about.

i admire your nonprofit's support of approval voting, which i think is probably the best-available practical procedure we have for single-winner elections!

in reply to interfluidity

@interfluidity absolutely false. You're confusing two different things. there's the utility of the actual thing you win, and then there's the utility of the game itself. this is a well understood phenomenon. when you see Michael Jordan playing a game of throwing quarters for the fun of the competition, that is about the most blistering reputation of your deeply confused nonsense possible. or just watch kids playing a game with no monetary prize whatsoever.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i'm not talking about a game. i'm talking about how people with little to lose take very large risks, even where the expected financial value of the risk net of the cost of taking it seems negative, because the upside of the right-hand tail is worth more than left side hurts. that's convex utility.
in reply to interfluidity

@cshentrup kids who become drug dealers to escape shitty circumstances, even when the modal outcome is you go to jail for a long time and the expected value is negative, are demonstrating convex utility.
in reply to interfluidity

@interfluidity or you could think a little more deeply and pick a smarter explanation. like lack of information on the odds of being caught, and the sentence. like when I got caught with a small amount of marijuana in Wichita Kansas and had to do a year of rehab and pay $1,200 in fines.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup you are one guy, can just be a mistake. the illicit drug industry relies on generations of kids systematically making the same "mistake" even watching their acquaintances and siblings pay and pay for it. it might be a systematic mistake or information problem, sure. or it might be that your model of their preferences is mistaken.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup over regions, sure it is. not over the whole range of conceivable utilities. real people's preferences are not described by simple functions whose characteristics are broadly unchanging over the entire budget space. log(c) is useful for models, not for predicting an individual's choices.
in reply to interfluidity

@interfluidity of course it is useful for predicting individual choices, as long as you account for externalities like information. this is the same reason the allais paradox in no way counters utilitarianism. You can trivially frame the question in a way that people won't make the inconsistent choice. it's about information externalities.

https://clayshentrup.medium.com/the-allais-paradox-a-paper-tiger-546ab21ca872

in reply to interfluidity

@cshentrup (to be clear about what is and isn't "orthodox", this take on the increasing marginal utilities over some regions near poverty is NOT a consensus view within economics, though it is debated and discussed. my description of utility, welfare, and the distinction between is orthodox and uncontroversial.)
in reply to interfluidity

@interfluidity what is uncontroversial is that welfare just means the satisfaction of preferences as defined by utilities. it's the number of utils you have.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup in orthodox contemporary economics there is no such thing as a number of utils. utility functions are ordinal, not cardinal. they are indistinguishable across affine transformations. the utility log(c) and 100 log(c) are precisely the same utility function.
in reply to interfluidity

@interfluidity this is utter nonsense. the concept of ordinal utility has been obliterated. it is a complete crank fringe concept, trivially refuted by a revealed preference lottery.

https://www.rangevoting.org/Mill

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup why do you think it helps a conversation to insult people?

i wish you were right, that economics as a discipline were more open to cardinal utilities. i think it was broadly an error to insist upon ordinality (an error made bc the profession wished to be scientistic in the way that you also wish to be, to be able to offer authoritative statements independent of values). but take a course in microeconomics and you will learn the contemporary consensus remains utility must be ordinal.

in reply to interfluidity

@interfluidity

I have refuted you through and through. No one in the field of economics seriously proposes ordinal utilities. You are living in a fantasyland. come to Jesus man.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity You are out of your mind. I have been in this field for almost 20 years and interacted with numerous economists. No one in the modern era seriously believes in ordinal utilities. You are dreaming.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup no one "believes in" ordinal utility, because utility is not a thing in the world, but a way of organizing models that are intended to explain and predict behavior.

no one publishes models based on cardinal utility.

in reply to interfluidity

@interfluidity of course utility is a real thing. it is the value an organism's brain assigns to different outcomes to make decisions.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup who knows? maybe neuroscience will find something like a value that corresponds to the utility functions we've imputed to try to summarize and predict behavior. or maybe not. in either case, utility functions long predate any such discovery. they are things we invented and impute because it's been a fruitful approach to summarizing and predicting behavior.
in reply to interfluidity

@interfluidity You don't need to observe it to see that it exists. You can observe the effect in the organism's behavior. people behave exactly 100% like we would expect if their decisions were made by a set of cardinal utilities and a goal of maximizing the expected utility of their actions. like to a T.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity and this is exactly what we would expect given that we were created by a selective process, where genes exist in proportion to their ability to maximize their own expected frequency.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup to say that people behave as if they are maximizing cardinal utilities is tautological, because you can always assign utilities consistent with the behavior you observe (at least if you are sufficiently fine-grained in the inputs you accept or permit time-varying preferences).
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity or if they do, they will readily concede the point if you just show them the results of a revealed preference lottery. I've literally done this.

I'm taking a microeconomics course right now from the University of Illinois, just for fun, and not seeing anybody propose ordinal utilities.

in reply to interfluidity

"the preference relation associated with a utility function is an ordinal property"

here's another screenshot, same PDF (this PDF appears to be a draft of an edition, since we see Exercise ??), "the special forms of the utility representations in (i) and (ii) are not preserved; they are —it cardinal properties that are simply convenient choices for a utility representation."

This entry was edited (1 year ago)
in reply to interfluidity

@cshentrup when I was taught this stuff, I was taught that utility functions are equivalent across affine transformations, ie given a utility function U(c), any function of the form a(U(c)) + b represents precisely the same preferences.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup it means you can't talk about utils as a quantity. if we let U=log(c) and c=100, we might as well have said U=100 log(c). you might argue that this is just a change in units, ie Fahrenheit is just an affine transformation of degrees Kelvin. but the substantive point is that you can't compare interpersonally. there is no way i can define U so that 10 utils of Jane's utility is worth the same as 10 utils of Joe's. there's no way to calibrate across people.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i'll take a look, but again i don't understand the role you see for leavening your remarks with insults. is there some theory i am not understanding that renders the insults productive?
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup your piece describes a normative point — one that i agree with ( and have written about https://www.interfluidity.com/v2/5486.html )

as a matter of policy, it does not matter, to me, that perhaps you are a "utility monster" and giving you a chocolate perhaps from some neurological or whatever perspective gives more pleasure than my basic bread gives me. 1/

in reply to interfluidity

in something like the harsanyi thought experiment, i'll simply argue that as a normative matter, when we model policy, we should treat one another as having the same preference (over broad aggregates like money or access to health care, not over chocolate vs vanilla).

but that is an axiom. there's is no empirical data or fact about the world that justifies the choice. it is not "empirical". it simply reflects my (and i suspect your) egalitarian values. /fin

This entry was edited (1 year ago)
in reply to interfluidity

@interfluidity of course there is objective empirical data here. for instance, someone like my wife who has Marfan syndrome and needed a 1 million heart operation has a different decreasing marginal utility per dollar then someone without that condition. this part of the reason we can justify a universal health care system versus just giving people money.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup the objective data is she would die without the operation (i hope she is well!) while others might use the same million to buy a new house. but there is no science that can tell you that her (wonderfully) continued existence creates more "utils" than some particular person's new house. it's a choice about interpersonal values i agree with, but i can't fall back to some empirical science to make for us. we have to make it.
in reply to interfluidity

@interfluidity I just link you to a blog post refuting your confusion about interpersonal utility comparisons. You do not need interpersonal utility comparisons to support any of the arguments I've made. You are confused.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i read your post. it's fine. it argues we should ignore actual utilities as they might exist as a positive, real-in-the-world concept that differs between people, because if we conduct a veil of ignorance thought experiment, we couldn't weight on individual differences. it's a conclusion i agree with, and a fine way to get their, but hardly beyond contestation.
in reply to interfluidity

@interfluidity Yes it is obviously beyond contestation as proven by the fact that no one has ever been able to contest it, as now further demonstrated by the fact that you yourself cannot contest it.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup that you don't acknowledge the merit of anything that challenges your worldview does not constitute evidence for your worldview. you are a strange beast to me, in that i think we agree a great deal in practice — i'm certainly glad your wife got her surgery rather than someone getting a house!, we both advocate approval voting. but at a theoretical, especially epistemological, level, we are on very opposite poles.
in reply to interfluidity

@interfluidity I don't acknowledge the merit of invalid arguments, no. it's not about my world view it's about the fact that I can trivially refute your arguments as I've been doing. You threw out interpersonal utility comparisons, they turn out to be irrelevant. every argument you've made I've seen a thousand times and debunked. You have to try to make good arguments if you want to make a case for something.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i'll guess we'll have to rely upon others to decide whose arguments have merit and whose have, um, less. You think you've got everything covered. I think your claims are quite unpersuasive. As I said when we began this conversation, we've had it before and I found it fruitless, and I think we now have again. I enjoy talking with you about other things!
in reply to interfluidity

@interfluidity I have objectively refuted your arguments. I don't care how you emotionally feel about what is persuasive. I have presented ironclad mathematical arguments that you cannot refute. for instance picking a bag of money without knowing the currency it is in and how that demonstrates that you don't need interpersonal utility comparisons for anything I'm arguing. My argument is sound. it is 100% valid. You have nothing.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i'm not offering any emotions. i'm just saying that it seems like neither of us have persuaded or are likely to persuade the other. your characterizations of me are similar to those i might offer of you, if i were less averse to being insulting. we won't resolve this controversy between us. perhaps if we debated before an audience it might be interesting who would be more persuasive to third parties. (as a thought experiment, i'm not proposing we do that.)
in reply to interfluidity

@interfluidity I don't know why you keep using this word persuaded. I proved my case. If you think I didn't, you can try to refute it. You haven't been able to do that, objectively. I explained why, objectively, you don't need interpersonal comparisons of money. You have no counter to that. I have persuaded me and so far as I have proven you wrong. so if you say you're not persuaded you're just making an emotional statement. You are stopping your feet like a small child.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup if you say so. again, since we don't find one another's claims persuasive in general — rightly or wrongly i am far from persuaded! — i'm unlikely to be persuaded of your uncharitable characterizations either. whatever you declare must be truth and fact.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity I mean it's fine if you just took a run of the mill economics degree and have a lot of these common blind spots. But you talk as if you have some stronger expertise in this field and yet you make pretty blatant novice fallacies that we experts in the field see often. like you thought we needed to have interpersonal utility comparisons. I wrote that blog post because of how common this misunderstanding is among lay people like yourself.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup again, i will say that i think some of your views could be much better thought-out and developed (and i think the scientism you pretend to, that there are true correct answers to social questions independent of values is quite destructive in practice), but i don't see the purpose of insulting people, even if i disagree with them, think little of their views, think their views counterproductive in social and political affairs.
in reply to interfluidity

@interfluidity they are already very well thought out and developed. You are just being tripped up by common novice fallacies. like you just demonstrated a confusion where you thought we would need interpersonal utility comparisons to compare a house to a surgery. I can explain for you why that's wrong if you like but it's obviously wrong and you are confused.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup we very much disagree about who is making novice errors. but i'd not ordinarily use words like that, and don't like doing it even here, because it's hardly constructive.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity we are simply asking which policy any given individual would support for their own selfish reasons. No interpersonal comparison of utility is required. by merely talking about interpersonal comparisons of utility, you demonstrate that you are deeply confused.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup you are asking people to conduct a thought experiment in which they don't know anyone's identities. when they do know identities, they value their own houses over other people's surgeries all the time. i like your (harsanyi’s, rawls') hypothetical! i think it encourages people to be better, to not privilege people by their identities. but none of us lives up to it, and the market system you admire signally weights welfare by purchasing power. it is not incontestable.
in reply to interfluidity

@interfluidity No no no no no
You're taking that term too literally. You might know that you are a billionaire and therefore support low tax rates. but there are things you don't know about your future self. All that is practically irrelevant is uncertainty about the future. again you're not following.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup billionaires do not actually behave, particularly in their policy advocacy, as though they might become paupers next year. and you and i won't give up our homes because someone needs surgery they have no insurance for, even though our own values (or your utility computations) would suggest perhaps we should.
in reply to interfluidity

@interfluidity of course billionaires are very unlikely to become paupers next year. whatever you're arguing against it's not any argument that I have made. as I just explained your wildly exaggerating the point about uncertainty. All we're saying is that there is some uncertainty.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup I agree. The preferences of the very wealthy become close to risk neutral, over ranges where the losses leave their wealth at very far from levels that would threaten their actual consumption amenities.
in reply to interfluidity

@interfluidity You've got to stop using the word risk. risk is like epicycles. the issue is diminishing marginal utility.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup economists use expectation over Von Neumann–Morgenstern utility functions ("expected utility") to characterize risk preferences. lots of people would take a guarantee of 1M over a 50% chance of 3M, suggesting they are risk averse. the fact people are willing to forego in expectation 0.5M is an interesting observation about actual human preferences. it's hard to express that without saying that, over this range, the person who chooses 1M prefers certainty or lack of risk.
in reply to interfluidity

@interfluidity it's not risk preference it's utility maximization preference. calling it risk is obviously stupid as I demonstrated.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup there is a 100% chance you lost 0.5M in expectation, a 50% chance you lost 2M in fact, under your scenario. it's not a mere matter of declining marginal utility. under some functions — with declining marginal utility — a very wealthy person takes that bet. Under others they do not. See https://en.wikipedia.org/wiki/Risk_aversion
in reply to interfluidity

@interfluidity Well you're not an idiot compared to the average human walking around. maybe you are in the 99th percentile but you aren't in the 99.9th.

and of course it was informative because I demonstrably taught you a bunch of things you didn't know, most notably how interpersonal utility comparisons aren't necessary to justify utilitarianism in any sense.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

i'm glad to be informed, and the harsanyian / rawlsian /shentrupian thought experiment is a fine one, but it has been my view for a long time that that social-welfare-function-style "utilitarianism" is a worthy exercise despite incomparable interpersonal utility. our difference is that i recognize the result of such exercise as inherently reflecting the values of the exercisor, and you think it can reflect scientific truth only a fool could deny, regardless of values.
This entry was edited (1 year ago)
in reply to interfluidity

@interfluidity You have cited zero evidence that there are any values involved. You have to stop making claims without evidence to back them up. it's deeply childish and obnoxious.
in reply to interfluidity

@interfluidity sure. You too. And as always, get back to me if you ever find us until of evidence to support your assertion that anything I claimed involves subjective unproven values. I'll wait.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity avoid a rawlsian " veil of ignorance" interpretation. we aren't talking here about being ignorant of your identity. we're purely focusing on the part about being self-interested.

for instance imagine Alice Bob and Eve are being asked which of several economic regimes they want. to simplify let's just imagine they are voting on how to allocate a sum of cash. Alice is in poverty, Bob is middle class and Eve is a billionaire hedge fund manager or whatever...

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity of course the ideal policy for each of them is that they are the one who receives 100% of that lump sum of cash. but the other two wouldn't go along with that. they would overpower that single winner. so what we are looking for here is the Nash equilibrium in a self-interested game theory sense.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity a great example. a revenue neutral land value tax distributed as a UBI would make 70% of citizens better off. thus a huge majority has an incentive to promote such policy, if they are properly informed.

https://www.ubicenter.org/uk-lvt

this requires no ignorance about your identity.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i think you'll find people who identify as owners of valuable land will be unenthusiastic about the policy, and they'll have some success convincing lots of others! (i'd be for it!)
in reply to interfluidity

@interfluidity it doesn't matter if you have valuable land if the corresponding refundable tax credit makes you net ahead. which it would for 70% of the population.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup there are lots of policies that would benefit more than 70% of the population that 70% of the population don't meaningfully support. a UBI financed by an income tax increment, which i think you don't favor, could be set so that more than 70% come out net ahead. that's not on its own dispositive, politically or as a matter of policy.
in reply to interfluidity

@interfluidity okay your fallacy here is transparent so let me explain it to you. support is relative. That policy might be better for 70% relative to the status quo, but it would be even better still to replace it with a policy that uses efficient taxes instead of income taxes.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i think income taxes at high levels are super efficient, because i think the negative externalities of concentrated wealth and income on a liberal democratic society are at least as noxious as the negative externalities of land rent.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity so if I say I don't "favor" that policy, I mean that there is another even more optimal policy that we should be pursuing. although I'm just on the cusp of being in the one percent given our annual household income is about 620 so... I admit I'm conflicted here. 😄
in reply to interfluidity

@interfluidity That isn't the case with economics because you can compensate people. kaldor-hicks efficiency. I need to write a blog post about this because I research it then forget the details a few times a year.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup the distinction between Kaldor-Hicks and the Pareto criterion is simply that the Pareto criterion requires the redistribution that would leave everyone better off, while Kaldor-Hicks only requires that such a redistribution would exist, regardless of whether it actually occurs.
in reply to interfluidity

@interfluidity we're in agreement I think. I will read your blog post later. your blog looks to be very much up my alley and radically beyond the mental capacity of 99.9% of the economic field that I've ever encountered including morons like Kenneth Arrow and Eric maskin.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup it's nice to have a point of agreement! though i'll still prefer we not call people morons, some i might think highly of, some i might think less of, but regardless.
in reply to interfluidity

@interfluidity okay sure. I don't really have emotions or empathy so it's less of concern for me but if it makes you feel better...
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

it does! i appreciate your making an effort, even if it's only a matter of simulation. 🙂
This entry was edited (1 year ago)
in reply to interfluidity

@interfluidity I still don't know why you would call kaldor "incoherent". to me it just means that a policy can be good as long as we can augment it after the fact with redistribution.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i like Kaldor, and i think i've learned that in fact he was very concerned with actual rather than potential redistribution. but the Kaldor-Hicks criterion that has found its way into textbooks demands only that redistribution could be enacted, and licenses economists to declare a policy efficient whether or not politicians actually do. that, it turns out, is incoherent even on narrow economic grounds.
in reply to interfluidity

@interfluidity I mean yeah you're technically correct but in principle we can always tack on the redistribution later and it's only a matter of whether it's politically possible.
in reply to interfluidity

@interfluidity I'm surprised you're not more interested in alternative voting methods given they are far and away the biggest utility increaser of any kind of public policy we know of, and cost nothing.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity of course this always comes up when you advocate efficient taxes rather than progressive taxes because people are like, oh you're going to hurt the poor. No you moron you can just redistribute the money after the fact via UBI.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup dude i've been writing in favor of UBI like forever. i'd prefer an income-tax financed UBI than say a VAT funded UBI, because i think compressing the income and wealth distribution is socially efficient. but almost UBI, however funded or not, is going to be great for the poor. importantly, we want it to be good for the middle class too.
in reply to interfluidity

@interfluidity but taxing income or any kind of human produced value is stupid because it creates dead weight loss. I mean, at the very least you want to exhaust all of your pigovian and land value taxes before you go there. some productivity taxes might still be utility efficient but it's a big gamble.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i think a pretty fundamental point of disagreement between us will likely be our views on the relationship between income and production. i think high levels of income (higher even than yours, this isn't personal) derive almost entirely from rents, and so it is efficient wrt to production to tax it. (rents hinder production by diverting resources to rent-seeking.)
in reply to interfluidity

@interfluidity this argument simply doesn't work because those taxes can't specifically target the rent seeking component of the wealth and rent-seeking is an incredibly tiny fraction of the wealth generated by rich people. they generate their wealth through capital allocation. just cannot be controversial. You can't tell me Warren Buffett got to be as rich as he is because he just got a lot more government graft.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup most rents are not government graft. they derive from market power, the ability to prevent competition. Warren Buffet is famously open about how his wealth derives from businesses with moats.
in reply to interfluidity

@cshentrup under the hypothetical capitalism in neoliberal models, economic profits (ie those above market rates of return on entrepreneur and physical capital inputs) are transient rewards to innovation, for firms that jump ahead until competitors catch up. durable economic profits are rents in the sense they'd not prevail under perfect competition, though we might argue whether some barriers to competition (eg "network effects") are "legitimate".
in reply to interfluidity

@interfluidity but You can only know this in aggregate. You can't look at any specific company and calculate the percentage of their profits that came from a truly transformational technology, maybe like open AI, versus pricing power.
in reply to interfluidity

@interfluidity so you mean a rent in terms of having a monopoly in a country that doesn't sufficiently break up monopolies?
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup neoliberal models tell a really hopeful story about how markets work under the assumption of a close approximation of perfect competition. in the real world, there are lots of things that prevent such an approximation from holding. some of it is physical — Schumpeter famously pointed out that the corner store thrives due to the market power its proximity to some customers confer. 1/
in reply to interfluidity

@cshentrup "break 'em up" is not always and everywhere the right solution (though we should be doing a whole lot more of it!) but in general we face this challenge: if we want markets to be prosocial, they have to be in fact, not in theory, vigorously competitive, and we'll know that because extraordinary profits will be transient rewards, not permanent franchises. how do arrange that without killing other geese requires detailed attention by industry, i think, rather than broad strokes.
in reply to interfluidity

@interfluidity No you won't know because you can't disentangle the components of the profit that came from anti-competitive practices versus innovation. they are all mixed together.
in reply to interfluidity

@interfluidity I think you might be using an intermediate era definition of neoliberal because that doesn't match what the original or the modern day neoliberals believe at all.

https://twitter.com/ne0liberal/status/1665034853643853828?s=20

but regardless, you still can't accurately attribute the component of wealth derived from skilled allocation and value creation versus anti-competitive practices so I think it's mostly a moot point in practice.

in reply to interfluidity

@interfluidity show me an example where you can even get in the ballpark. like where you could look at a company and say 60% of their profits were rents and 40% actual value creation so if we tax them it will only be "40% inefficient". and again even if you could do that, we already have plenty of untapped pagovian and land value taxes that are NEGATIVE dead weight loss and neutral dead weight loss respectively. I just don't even see a semblance of an argument here. help me out.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup i'm not interest in taxing corps. that just encourages bad capstructure, until we also eliminate the tax deductibility of interest. i'm interest in taxing the very wealthy, and am entirely unconcerned that in cohorts among whom money represents score-keeping and zero-sum insurance, changing the baseline of competition by taxing them all equivalent will impair production. concentrated wealth imposes huge costs. taxing the very wealthy is a fiscal positive plus a social gain. win win!
in reply to interfluidity

@cshentrup (i do have some interest in taxing corp profits, if we can eliminate the deductibility of interest, because doing so encourages reinvesting in whatever creates an asset that firms can expense, including for example adopting a high-investment rather than high-turnover model of labor relations. but a guy who calls himself "neoliberal" is unlikely to be too enthusiastic about that argument.)
in reply to interfluidity

@cshentrup (and i'm interested in excess margins taxes, as a means of combatting market power. we want forms to maximize PQ by maximizing Q rather than P. again, i doubt i'm gonna persuade a guy whose moniker is "neoliberal", but this is directly a tax intended to support production rather than rents by reducing the relative value of exploiting pricing power vs expanding production.)
in reply to interfluidity

@interfluidity STOP the "persuade" nonsense. either you have valid argument or you don't. if you tax e.g. 40% efficient, that is WORSE than taxing land (0%) or pigovian (-%). this is grade school math. either you have an argument or you don't. what is your argument? please stop handwaving and SHOW DATA.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup human affairs aren't math, or decidable by math. math is a tool, which can be wielded well or poorly, but decides nothing. the perfect math of your model will drive you to do the wrong thing when your model is wrong. which it is, very badly, my neoliberal friend.
in reply to interfluidity

@interfluidity this is more "woo woo". anything about human affairs is expressible via quantities. you're making religious statements.
in reply to interfluidity

@interfluidity stop the ad hominem fallacies. either you have a valid argument or you don't. you don't want to "incentivize reinvestment". you want people to choose consumption vs investment *rationally*. minimize deadweight loss.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup There are more things in heaven and earth, my dear Horatio, than can be drawn as Harberger triangles.

Money and investment are different things. Access to funds flows can sometimes rival rather than support investment. Perfectly rationally, from a shareholders perspective, but not from a social perspective. Those interests are different, and often misaligned.

in reply to interfluidity

@interfluidity this is word salad and you sound like an idiot. please speak like an intelligent grown-up. i made a very specific argument about the efficiency of a given tax. what is your ARGUMENT? show your fucking math or shut the hell up.
in reply to interfluidity

@interfluidity you've shown NO EVIDENCE for that. i stated an objective fact: a tax on a value that is only partially derived of rents is less efficient than one entirely derived from rents. you are acting like a fucking imbecile.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

what's your evidence that whatever social value is incentivized by payments to the very wealthy are larger than the social costs that wealth concentration imposes? you don't show any evidence. you just have priors over what matter more that are, i'd suggest, mistaken.
This entry was edited (1 year ago)
in reply to interfluidity

@interfluidity i made no claim about payments to the wealthy. you're deeply confused. i stated a trivial fact: that your proposed tax, even if it is in LARGE PART rents, is still less than 100% rents, whereas LVT is 100% rents. what part of this do you dispute? you appear to be deeply confused.
in reply to interfluidity

@interfluidity the whole point of taxing rents is that it has NO DEADWEIGHT LOSS, i.e. it has NO EFFECT ON BEHAVIOR, you dummy.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup taxing rents absolutely affects behavior. that's a good thing! the theory of a land value tax is that you don't have to worry about discouraging land production. but, for example, we do want to discourage the production of lawyers who file patent troll lawsuits. taxing the wages of that kind of activity — rent-seeking — certainly will affect the behavior!
in reply to interfluidity

@cshentrup that's a large part of why we want to do it! people get paid money for a lot of activities that are not socially useful, but that are a negative social contribution. we want to tax those flows, so that people do less of it. we want to tax the production of bads, which includes activities like exploiting pricing power rather than expanding production to increase profits.
in reply to interfluidity

@interfluidity i think what you're *trying* to argue is that these activities aren't just *receiving* rents, but actively causing more rents, i.e. a negative externality, which means taxing them could actually be in aggregate more efficient than a 100% efficient tax. but boy, are you bad at trying to clearly articulate your ideas. i have to translate them into english for you.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@interfluidity you have a lot of ideas with a semblance of rationality to them, but they are severely muddled and fuzzy and you absolutely have no skill at clearly articulating them using precise language.
in reply to interfluidity

@interfluidity a rational way of combating a market failure is to try to fix the market failure. break up a monopoly for instance. if you indiscriminately tax across the board in order to stop some negative externalities, You also cause a huge amount of dead weight loss amongst the entire economy. this is incredibly stupid. this is not even serious.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup consider fire insurance. the first best solution is to prevent fires. often we fail. the second best solution is to have sufficient savings to cover eventualities. the third best solution is fire insurance, which creates a lot of deadweight administrative costs relative to the first or second best solution. 1/
in reply to interfluidity

@cshentrup yet, we find ourselves unable to reliably prevent fires so certainly we don't need to worry about the, um, risk. most of us are not able to save enough to cover that eventuality from savings. so we choose to bear costs of administration—deadweight costs relative to the first or second best solutions—to pay for fire insurance. is that rational, smart, under the circumstances? it depends on the scale of the costs. if premia were much higher than the expected loss, no. if near, yes. 2/
in reply to interfluidity

@cshentrup i agree that it would be much better if we could structure the economy so that there were fewer rents and barriers to competition, rather than tax the result of all that at the back end. i very much support antitrust, IP reform, and other policy that would address those problems. but it may in fact be the case, as a matter if real world politics, that we just cannot prevent the rents up, especially given the incentives created by lightly taxed receipt of them. 3/
in reply to interfluidity

@cshentrup if the politics of the second best solution — taxing at the back end, both to limit the damage to the distribution and discourage the behavior — are more tractable than the detailed industry-by-industry work challenged at every turn by better funded, better informed lobbyists, then like fire insurance on the back-end, it might be wise to go for the second best. 4/
in reply to interfluidity

@cshentrup note, in both cases, the solutions aren't mutually exclusive, and we should always pursue the first best! have fire extinguishers! support antitrust! 5/
in reply to interfluidity

@cshentrup but until we succeed at the first best much more fully than we have thus far, we will need to supplement it with the second best.

as long as the costs of the second-best, the backstop, are reasonable! which is why the question of what behavior in fact different taxes would discourage and encourage is the heart of the question. 6/

in reply to interfluidity

@cshentrup if i am right that FDR-style taxation discourages very little that is productive and compensation choices that yield a better income distribution, we should do it!

if i am wrong, and in fact FDR-style taxations would lead to an atlas-shrugged style withdrawal by the best and brightest of our community and an economic catastrophe for all, then we should look for different approaches. 7/

in reply to interfluidity

@cshentrup there are controversies here, about politics and human behaviors, that math and supply-and-demand diagrams can't solve. even "evidence" can't definitively resolve it, because no experiment or observational study that is plausible is anything near the full policy intervention. 8/
in reply to interfluidity

@cshentrup this is true of UBI too, where i think we mostly agree. people argue over incentives to work, etc. most of the evidence that i know of is pretty positive on these grounds, and the non-increase of an effective tax rate is an argument that's labor supportive. but the other side claims the mere reduction of desperation will harm work incentives.

you can't know for sure until you have some history with it. that's just the nature of social affairs! /fin

in reply to interfluidity

@interfluidity Well of course it may be true in the sense that it is remotely possible. I just don't see any evidence that for instance a broad tax on the profits gotten by creating a moat constitutes a pigovian tax on creating moats, and that such externalities are such a large portion of that tax that it would be in net more efficient than a land value or pigovian tax.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup it would be better to prevent rent collection in the first place. but as a matter of informational and political problems, we seem unable to do that adequately, leading to very grave social harms. we should continue to improve on preventing rent collections, as best we can, but since we are unable to adequately do that, we should seek second-best backstop solutions to address the problem, if we can find backstops that aren't too costly.
in reply to interfluidity

@interfluidity I still don't see you preventing any evidence that such a tax would be more efficient than land value or pigovian taxes however. You also seem to be conflating the profits coming from a moat with the negative externality cost of creating the moat. suppose the moat makes a certain good only 5% or 10% more expensive than it would have been, taxing 20% or more could easily create more dead weight loss than you save. You need immense resources to see if this pencils out.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup probably we disagree over just how grave the consequences of economic concentration and the inequitable distribution of wealth and income are. in my view, they are apocalyptic, our society (or at least our liberal, nonauthoritarian version of it) won't long survive and won't prosper if we fail to address them. 1/
in reply to interfluidity

@interfluidity Well that's a whole other issue on top of the direct welfare impacts. which is why I co-founded one of the two major electoral reform organizations in the US.

https://www.rangevoting.org/LivesSaved

in reply to interfluidity

@interfluidity Well yes I found Warren Smith's website on range voting and worked with him in several other activists for several years starting in 2006 and then we finally incorporated the center for election science in 2010 and got our 501c3 status in 2011.
in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup good to know! i'm glad you do what you do. as i said yesterday, i think adopting approval voting for single-winner elections is perhaps the lowest-hanging social fruit we oughta pick.
in reply to interfluidity

@cshentrup note we are not talking about taxing production. we are talking about taxing receipts, firm payouts, resources that firms never use. firms can produce, would continue to have at least the resources, that they do now (at least because if you tax payouts, they pay out less). /fin
in reply to interfluidity

@interfluidity it's not at all necessarily true that the best option is to prevent the fires. That may not be cost effective.

it's also not particularly relevant to the question of what percentage of profit is the result of causing negative externalities.

in reply to clay anderson 🇺🇦🇮🇱🔰🥑🌐🚲🗽☢️

@cshentrup you really should join an economics department. all that time i spent playing with CARA / CRRA / DARA utility functions, described as reflecting different kinds of risk aversion. i'm open to its all be less than worthwhile, but i wonder what you'd substitute for it!
in reply to Mario Zechner

Why and how should it be illegal to crawl that data?

Before I read this toot, I wouldn't have worried about this in the slightest.

in reply to Mario Zechner

It's probably even worse, because people have obviously picked up on the practice of only buying at discounted prices, so the real average price will be biased towards the discounted price. Also, this whole practice seems like a play against price-sensitive customers where the price sensitivity does not lead to more pressure for competition but the impression of cheap prices (via frequent discounts) is enough to get people into your shop.
in reply to Mario Zechner

In Poland we recently got a regulation saying that when advertising a discount, the shop has to provide the lowest price from last 30 days as comparison.

So if 2 weeks ago it was 2.99, yesterday it was 3.99, and today they're lowering the price again to 2.99, they d have to say they lowered from 2.99 to 2.99

in reply to Wolf480pl

I’m sure you’ll be shocked to learn it’s an eu regulation (and even steam now obliges by it but example)
in reply to Cat poni, Whorseman of Apocalypse

@pony @wolf480pl The regulation only requires displaying the selling and unit price. That is in effect here. It doesn't concern discount prices at all. Read the text.
in reply to Mario Zechner

Would you mind taking the same screenshot again, just including one more paragraph following the header on the bottom of it please.
in reply to Cat poni, Whorseman of Apocalypse

mea culpa, this wasn't intentional only. Watching our 2 year old and only quickly scanned it. You're right! Interesting.
in reply to Mario Zechner

now of course i don't know how this was transposed into austrian law, however i don't see any exemptions for particular member states, so i assume it somehow was
in reply to Mario Zechner

Ist eine #EU-Richtlinie, die mit Wirksamkeit zum 2022-05-28 umzusetzen war: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32019L2161 (Artikel 2, der in 98/6/EG einen Artikel 6a eingefügt hat). In Deutschland werden seitdem meistens keine Prozente mehr genannt, wenn der Artikel in den letzten 30 Tagen schonmal billiger war, sondern bloß noch »Knüller« o.Ä..
in reply to Mario Zechner

In Australia, Coles does this.

It's yet another advantage rich people have over the poor: I pay less for my groceries because I can buy them when they're discounted before I need them, and ignore them when they are not discounted.

in reply to Mario Zechner

Confusopoly. Why compete on price where costs scale per unit sold when they can obfuscate the price and compete on marketing, where costs don't?
in reply to Mario Zechner

in The Netherlands where there's arguably quite some competition, many retail chains promote their shops by proclaiming they never have discounts
in reply to Mario Zechner

that is what happens in the Netherlands too. Therefore, many things are cheaper in Germany than in Holland!
in reply to Mario Zechner

In Hungary, in LIDL, you also have to activate the coupon in the mobile app and then read the loyalty card at the cashier to get the lower price. There used to be a sign for the discounts in the store but IIRC the last time the store only displayed the higher price and you only knew about the discounts from the app.
in reply to Mario Zechner

Insight and frustrating data for me - as here in Lithuania, Red Bull is normally €1.49 (and of course discounts drop it a bit), so pricing probably resembles the Austria, rather than Germany, graph. I have a strong suspicion there is also supermarket collusion here (there are only three bigger supermarkets + Lidl), but I’ve not actually done much data analysis to confirm my theory.

Lidl definitely does the non-standard product sizes - I compared Lithuanian water bottles from there vs. normal shops where they were a tiny bit more expensive, and realised that the bottle I thought was 2L (from the normal store) was 1.8L at Lidl and the same or more expensive by volume!

in reply to Mario Zechner

Thank you. Between Germany and Austria it seems there is a difference of 3% in VAT on basic food items.
in reply to Mario Zechner

Regarding comparisons across countries you need to be a bit careful because the listed prices include VAT and that is different in different countries. AFAIK Germany has a significantly different VAT for beverages, for example.

In any case, thanks for your great work. I hope that exposing this cartel will have some serious consequences.

in reply to murks

@murks the VAT rates of Germany and Austria are indeed different, but not by 40%.
in reply to Mario Zechner

You are right, certainly not by that amount. It seem that Germany has 19% VAT for beverages compared to 20% in Austria, so not significant.
They have only 7% for some articles like food and we have 10%. Apparently we also have 13% for some articles it seems.
So yeah, you were right about roughly 1-3% difference.

I wonder whether the German "Dosenpfand" plays a role in the Redbull comparison, but I have no idea how that works.

What is for certain is that the Oligopoli is a problem.

in reply to Mario Zechner

I just saw news about Carrefour warning its customers about products showing shrinkflation: https://boingboing.net/2023/09/15/french-supermarket-chain-carrefour-puts-shrinkflation-warnings-on-price-gouging-brands.html

That's a pretty unusual move from a supermarket chain

Mario Zechner reshared this.

in reply to Mario Zechner

Certainly, I just didn't expect such an entity act on it
in reply to Mario Zechner

@yawnbox the price hikes the achieve with this method is sometimes crazy… some products are 40%+ more expensive
in reply to Mario Zechner

@LordCaramac

The amount of plastic used looks the same. Haven't manufacturers heard that plastic has contaminated every environment on Earth?

Of course, they have. But...

in reply to Mario Zechner

This is very similiar in Germany. All basic, non-name products cost the same, at Lidl, Aldi, Rewe etc.
in reply to Mario Zechner

"Collusion ain't a crime. The judges we bought said so."
in reply to Mario Zechner

This in particular made me think of gasoline prices here in the US. I now know that pricing at each gas station is done mostly automatically, because station owners pay for software that supposedly monitors other station prices and comes up with daily price changes. But, if most of the stations are using the same software...
in reply to Mario Zechner

Sounds like Austrian supermarket duopoly is as bad as the Australian supermarket duopoly.
in reply to David Ingram 🌻🍍🥝📡⚡

only a few lettes difference, no surprise.

But you have haver kangaroos and koalas.

Well, and everything else that tries to kill you on an hourly basis.

I'm sorry you have it worse.

in reply to Mario Zechner

my partner, a systems engineer, says this looks like naturally emergent behaviour from a poorly tuned feedback loop, aka @standupmaths story of the $23 million book. It doesn't require obvious collusion, just automated systems monitoring each other with an inbuilt bias to slightly increase prices.

It would be interesting to know the dates the supermarkets started monitoring each others prices.

Guessing they tweaked the global % increase when petrol prices went up, and at least one of the supermarkets turned theirs down when your stuff was reported.

in reply to Mario Zechner

Rookie question: in the countries where the data has been scraped to date, is the data on the grocers' websites behind a login, or is it just available?

Here you have to log in to even see the products and the prices.

in reply to SabrinaDent

@sabrinadent they aren't behind a login. In Austria, most have a REST API to handle product searches on the store website. That's where we get our data from They expose their entire online product line-up which matches local stores for the most part.
in reply to Mario Zechner

This is an amazing bit of data digging. My guess is that if you looked at Canada you would find something similar--maybe not quite so automated but definitely the same in spirit. Canada has only three large grocery store chains and have been slapped down a few times for anticompetitive practices, but no sanctions serious enough to make them stop.
in reply to Mario Zechner

Great work on all of this. I'd love to see if there's a way to get the data from US grocery stores.
in reply to Mario Zechner

Are the prices on the web stores always the same, or at least related consistently to the prices in-store? One of the things I've noticed here in the U.S. is that supermarkets often have different prices posted online. Often they are higher, charging a "convenience tax" for saving you from walking around the store to find the items yourself. Other times the product in store is placed to be an "impulse buy", and they mark it higher, knowing consumers won't compare.
in reply to CuriousMatter

@CuriousMatter they are most often the same. The online stores do not list local products. E.g. our local stores have locally produced donuts that aren't in the Austria wide online store.

Other than such things, it's pretty much the same on- and offline.

I can't speak for the much larger US market I'm afraid.

in reply to Mario Zechner

amazing work, thank you so much for doing this! Will you fully implement other countries (e.g. germany)?
If I understand it correctly, rewe/müller are only for comparison currently
in reply to Gamy

@MrGamy yes, REWE (Passau), Müller, and DM are only for comparison with Austrian equivalents.

I'm afraid I lack the time to tackle other countries. But I know for a fact that there are very capable developers all around the world that can take my public code and make it work for the stores in their countries. I'm happy to give guidance.

@Gamy
in reply to Mario Zechner

@MrGamy In the UK it is for example not necessary, there are several price comparison websites because the big 4 sell online. Lidl, Aldi of course not.
@Gamy
in reply to Mario Zechner

awesome project! 🔥🔥🔥 is something like this also available for Germany?
in reply to Mario Zechner

you are a hero!

just did the right thing at the right time

thanks for your contribution to society

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Mario Zechner
@jwildeboer @auris that's true for price decreases. We see it for price increases as well.
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innerand
@jwildeboer @auris Na, that only happens if you have a oligopol situation where the supermarkets have already (perhaps informally) agreed on their market shares.
In a functional market situation you would try to go bellow the prices of your competitors to attract their customers to grow you own market share.
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mhd
@jwildeboer @auris Mandatory public price lists would be awesome, though. We just need to keep it away from the old people who still drive to the next village just because milk is on sale…
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mhd
@jwildeboer @auris E-Ink displays? Apparently I'm not going to the fancier supermarkets here ;)
in reply to Mario Zechner

Very happy that I read your thread. I hope someone will pick this up in NL, too. Because shrinkflation and grabflation are widespread here, too.

Anyone in The Netherlands who is willing and able to pickup the initiative Mario started of collecting product price data and showing their price fluctuations through time? Otherwise we keep getting f*d up our tiny a**s by procucers and retailers.

in reply to Mario Zechner

Amazing thread, thank you.

I'm sure the same is happening in the UK, oh to see the data.

Outstanding work, and with your charity too.

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Auris
@KAOS we had suuuper strict anti-preisabspracheregelungen and trainings but of course, I don't know if the rewe purchasers or the companies had price arrangements. But they had their eye on all the prices from hofer/spar etc. and never wanted to go below. But if Hofer etc. raised their prices, they also did. 👀
in reply to Auris

@auris @KAOS aren't the low budget brands of spar and rewe (s-budget and clever) kinda officially linked in one way to the respective other brand & discounter prices because of the "tiefpreisgarantie"? (in which they guarantee you that you won't find a cheaper similar product anywhere else.)
in reply to daid

@daid @auris @KAOS yes. But they have been following each other upwards this past 18 months.
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daid
@KAOS @auris
of course. But it gives one reason why rewe "had their eye on all the prices from hofer/spar etc." as @auris pointed out.
And of course it's true, they just could stay low if anyone else increases and it seems like obvious price gauging if they all do it almost simultaneously.
I just wanted to point out that there are partial links between prices that rewe and spar even use in their advertisement.
in reply to daid

@daid @KAOS @auris the bigger link is that many of the store brand products are actually white label products. Both big chains slap their own label on the same thing.
in reply to Mario Zechner

a little bit of older "funfacts" (if you enjoy throwing up): docu film "Auslaufmodell Supermarkt?" from arte in 2021. dw.com currently has it at https://www.dw.com/de/auslaufmodell-supermarkt/video-65225439
and srf should have it in their mediathek as well. mediethekview helps getting it.

whats not to love about those companies...

reshared this

in reply to Mario Zechner

good job, well done. I recall that there was a website in the UK that did supermarket price comparisons, but it was shut down via copyright law: the supermarkets licence product images from a third party so when the guy used the same images as the supermarkets to.illustrate the price comparisons, he was threatened by the product image company and forced to shut down.

#copyright #competition #anticompetitive #supermarkets

in reply to Mario Zechner

you would hope there would be some kind of fair use/fair dealing/public interest copyright exemption, but these things tend to be expensive to find out one way or the other
in reply to Mario Zechner

Thanks for the long post on how and why you built a price-comparison tool for groceries in Austria. Fascinating read, and not surprising but very interesting results. Anyone in #Canada doing the same #inflation data-crunching? #PriceFixing #DataAnalytics #FoodPrices
in reply to Mario Zechner

this is interesting. I saw it's quite easy to add stores from other countries, but how difficult would it be to support a different currency?

thinking of adding Spar, Lidl, DM and Muller for Hungary, the problem is they have HUF instead of EUR.

in reply to Mario Zechner

Es gab amal eine Zeit, da hab ich mich gewundert, warum wir im Korruptionswahrnehmungsindex immer so weit unten stehen. Wundert mich jetzt eher, warum wir noch so hoch gereiht sind
in reply to Mario Zechner

This is what, in business jargon, we like to call "good fucking investigative journalism".

Good bloody job!

in reply to Mario Zechner

THIS is what should happen with data driven/supported stuff. Awe. Some. Work!!!! It will only take two or three more governments to react is this way and the spiel will be up 😉
in reply to Mario Zechner

Inflation is a word that describes the rich robbing the poor
in reply to Mario Zechner

This is incredible. Thank you for being such a force for good!
in reply to Mario Zechner

Your work is incredible. Thank you so much for sharing your conclusions and the means to emulate it.
in reply to Mario Zechner

Excellent thread. The whole inflation thing has been much worse in Hungary, mostly I'd guess the same kind of price gouging (interestingly lidlaldi managed to return to sub 500 HUF prices for a litre of milk on their own - from a ~850 maximum I saw last year) and a whole lot of political and economical mismanagement factors that make up the real gist of the "war inflation" in Orbanistan.

They made a price watcher app, but it's mostly aimed at "the evil foreign multinational corpos"

in reply to Mario Zechner

incredibly great thread. We see the same kinds of things here in the USA- usually increases, the phony discounts come a lot, too- some stores do this constantly. CVS (pharmacy chain) is notorious for this. Having higher prices than everywhere, then decreasing items to almost the amount they SHOULD be, and calling it a discount or a sale. Garbage capitalism.
in reply to Mario Zechner

Hey @pluralistic, you may love this thread

https://mastodon.gamedev.place/@badlogic/111071396799790275


Today was ... interesting. If you followed me for the past months over on the shitbird site, you might have seen a bunch of angry German words, lots of graphs, and the occassional news paper, radio, or TV snippet with yours truely. Let me explain.

In Austria, inflation is way above the EU average. There's no end in sight. This is especially true for basic needs like energy and food.

Our government stated in May that they'd build a food price database together with the big grocery chains. But..


in reply to Mario Zechner

This needs boosted far and wide. And this needs to happen in the US also.
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Mario Zechner
@marathon ah a well reasoned comment based on lived experience, right? You have absofuckinglutely no idea what you are talking about.
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Mario Zechner
@peterainbow wait, POS providers sell sales data from competing stores to each other? And that's not deemed anti-competitive?
in reply to Mario Zechner

fantastic work Mario. It set me thinking about how discounts penalise those who most need them when operated in the ways you describe.

Essentially, and I do this, those who can will stock up when a discount happens and rarely have to pay the full price.

But guess who cannot afford to do this, and so pay much closer to what you call the average price.

in reply to happyborg

@happyborg Absolutely true. Here in Austria, the stores have self-branded lowest cost products for this "segment" (what a terrible term).

They don't discount these at all.

Guess which products have significantly increased in price?

in reply to Mario Zechner

@happyborg Do you think this is the reason why Hofer/Aldi, Lidl don't have online websites? Lidl Germany writes these days about the vegetables prices only: actual daily price in the store. Zero transparency.
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Mario Zechner
@Fayedray I'm not sure were Nazis come into play here. I'd think given the suffering Nazi Germany (and it's willing helper Austria) have caused, that comparison is a bit distasteful.
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Mario Zechner

Well, thanks for educating me, person from some far away country who does not have to visit Ausschwitz as part of their school education, so they can remember what fucked up shit their grand and grand grand parents did. I too shall start just looking shit up on Wikipedia and make wild comparisons on the interrnet between entirely unrelated things.

Cheerio.

in reply to Mario Zechner

this job is greatly done. It is a pleasure to meet people like you out there. But, I am not an economist, i am afraid that bringing corporations to justice won't solve our problems. They are just greedy bustards and if they stop making enough money they will close their chains and we might wind up in the world of monopoly or scarcity. The answer to our problem is to make profit illegal but this may cost lives.
in reply to Mario Zechner

Mate. I swear you could replace Austria with New Zealand and have it come out the same. It was weird how close it matches the bullshit here.
in reply to Mario Zechner

Great story!

Practically the same thing happened in Croatia, only we did get a government-run price tracking site that had no real-world effects.

And we already did know that Croatian products are cheaper outside of Croatia thanks to all of the people that left the country in search of a better life :)

in reply to Erik

went to Croatia this July. Your peices are higher than ours. WTF.
in reply to Mario Zechner

Higher prices, lower wages :)

That's what you get when you have a criminal organization (HDZ) running the country.

But at least you can buy Croatian products for cheap in Austria :)

in reply to Mario Zechner

does anyone know of an user app that has the here presented features and respects privacy? smhaggle allows me to compare prices across stores and products, but is basically a marketing app that collects customer data.
in reply to Mario Zechner

This is wonderful. I'm sure very similar results would surface from a similar analysis in Canada. Grocery here is a mess or monopolistic nastiness.
in reply to Mario Zechner

Just when I am worrying about everything going to hell in a hand basket, you come along and let me hope again! Thank you, Mario!
in reply to Mario Zechner

Thanks for writing this and for doing all the work, I hope the investigations keep going!
in reply to Mario Zechner

I started building a scraper for some Canadian grocery stores today, nice and simple app. I added jest so I could test individual scrapers
in reply to Mario Zechner

price "increase" in Austria by shrinking product sizes (price is still the same but...).
in reply to Mario Zechner

@stux As our resident programmer, I’m sure you would love to create a version for our Dutch supermarkets. This threads starts with a cool story about the #enshittification of pricing by supermarkets, the Github code is somewhere below.
I would be interested, but my programming skills ended with Pascal..
in reply to Mario Zechner

This is a fascinating thread, thanks for your hard work (and I don’t even live in Austria 😀).
I noticed similar issues at one of our grocery stores (Stop & Shop), where they routinely do “New Low Price!” & I know the price the previous price was actually the same at one point.
in reply to Mario Zechner

It's been almost a year since. Any changes since this was published?