A great deal of conservative economic theory depends upon the idea that people in an economy make decisions based upon “perfect information.” Along with this and the questionable assumption that all people are rational, economists on the right explain how the economy will be just fine if we simply let it be. This is obviously a big subject that is debated between people who are much smarter and well-educated than I am. But I do have serious doubts about this “perfect information” assumption.
Yesterday, I went to Amazon to see about getting Liars for Jesus by Chris Rodda. For now, I am not going to get it because I have spent a lot of money the last couple of days buying books for a play about Evariste Galois that I am working on. But I noticed an interesting thing (although I have seen similar things many times before): the cheapest used copy is $28.92, while a new copy is only $23.99. And the new copy qualifies for free shipping if you spend just $1.01 more! (The used copy will cost an extra $3.99 for shipping.)
Since the prices change over time (although it is two days now and it hasn’t), here is a screenshot to show you what I mean:
I have long been suspect of this “perfect information” business, because I often find bargains simply because I will spend hours dismantling the shelves of book and electronics stores. But I’m a freak. Most people do not get the best price on an item, even when the best price is just next door. The situation is supposed to be much easier online. But if Amazon sellers don’t even know that their own items are over-priced compared to Amazon itself, how are consumers supposed to know who has the best price on the Internet generally, much less downtown or at the mall?