Pricing Inefficiencies

Barry Ritholtz has a great post about how the internet helps pricing inefficiencies.

One of the things that always surprises me about Economics is how long it takes for theory to be realized in reality. Self-interested economic participants are supposed to maximize their gains by being savvy, price sensitive shoppers.

Many people's own habits and laziness precludes that expected behavior — at least initially. Eventually, as it becomes more and more ingrained into the culture, we do begin to behave as the Economists expect. We may not shop around for gas at $1.89 — but at $3.89, a lot more of us do.

So too with books. Regular readers of this site know I recommend buying used books, if you cannot afford new ones. Apparently, many other people have been doing so.

His analysis is very interesting, so check out the entire piece.

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